DUTY OF CARE AND LOYALTY WHILE RUNNING JOINT STOCK COMPANIES UNDER THE TURKISH COMMERCIAL CODE

ABSTRACT Duty of care and loyalty are among the general principles regulated under the provisions of the Turkish Commercial Code in relation to joint stock companies. But, who owes these duties and for whom they are owed is argumentative. The standard of care prescribed in the Turkish Commercial Code is also open for arguments. In addition, their application in the case of controlled and controlling companies which is taken as an exception to the general rule is exposed to divergent views. In this article, the author argues that members of the board of director, managers and any person who has or exercises managerial power owe duty of care and loyalty for the company, shareholders and third party creditors. The standard of care prescribed in the Code is also a slightly different version of the American Business Judgment Rule. And finally, there is a room for the application of the principles in the context of a fully controlled company. To reach these conclusions, the author analyzed Turkish laws and different secondary sources