As Migros, we believe in having a strong corporate governance structure and place great importance on following corporate governance principles. We benefit from using these principles as it helps guide us in every phase of our activities. In addition, we recognize, as stated in the Turkish Capital Markets Law, Turkish Commercial Code and in other legal requirements, implementation of corporate governance principles are beneficial to not only Migros but also to our stakeholders and our country’s economy.
Fundamental principles of Migros’ corporate management approach are; fairness, transparency, responsibility, accountability and sustainability.
In this context, we establish a robust corporate structure, determine appropriate policies for corporate governance requirements and fully comply with regulations. To inform our stakeholders, Corporate Governance Principles Compliance Report is published every year. Our website is updated daily to present detailed information about our company to our stakeholders.
to access the Corporate Governance Principles Compliance Report.
On 20 October 2015, a two-year agreement was executed with SAHA Corporate Governance and Credit Rating Services, Inc., which holds an operating license to be engaged in performing ratings in accordance with the CMB’s Corporate Governance Principles, for the rating of our Company’s compliance with corporate governance principles.
In the report issued following the rating process, our Company was assigned a Corporate Governance Rating score of 9.46 (94.55%) as at 30 December 2015.
The report includes the following remark: “Migros’ Corporate Governance Rating has shaped up as above in consideration with the Company’s determination to apply corporate governance principles, its willingness to manage this process continuously and dynamically and improvements which had been initiated in this direction.” The Company qualified for inclusion on the Borsa İstanbul Corporate Governance Index as of 6 January 2016.
The individual scores assigned for each heading to our Company are presented below:
||Assigned Score (%)
|Public Disclosure and Transparency
|Board of Directors
Migros’ Board of Directors, the company’s top level strategic decision maker and controlling body, are elected to serve for a limited period of time in the General Assembly. Migros’ Board of Directors evaluates all risks and opportunities, particularly economic, financial, social, environmental, governance, operational and legal risks and opportunities; and in this context, defines the strategic objectives of the company considering legal requirements and regulations, articles of incorporation, corporate policies and guidelines. The Board is responsible, in accordance with the corporate governance principles, for the company’s risk and return balance, while taking into consideration the growth and the interests of the company.
Migros’ Board of Directors consists of twelve people; of whom all are non-executive members besides the CEO. Migros has four independent members as defined by CMB principles. Both the roles of the CEO and Chairman of the BoD are carried out by different individuals who are representatives of Migros. Detailed information about Board of Directors can be found in the “Investor Relations” section of our corporate website.
To increase the operating efficiency of the Board of Directors; the Corporate Governance Committee, Audit Committee and Early Detection of Risk Committee have been established.
Corporate Governance Committee
The Corporate Governance Committee, which is comprised of three non-executive members, the Investor Relations Group Manager, and an independent member undertaking the committee chairman position, determines the level of compliance with corporate governance principles and oversees the Investor Relations Department activities. The Committee also fulfils the duties of the nomination and remuneration committees to the extent allowed by CMB principles. Detailed information about the remuneration of board members and managers with executive responsibilities can be found in our Corporate Governance Compliance Report.
The Audit Committee is responsible for oversight of the accounting system and financial reports disclosed to the public. In addition to these responsibilities, the committee is responsible for overseeing the effectiveness of internal controls and the internal audit systems. The committee consists of two independent and non-executive members, one being the Chairman of the Audit Committee.
Early Detection of Risk Committee
The responsibility of the committee is to identify and detect the risks that could jeopardize the company’s existence and continuity at an early stage. The Early Detection of Risk Committee examines the risk management system at least once a year. The committee consists of six members, including four independent non-executive members of the Board. An independent board member assumes the Committee Chairman position. One of the members is not a member of the Board and serves as CFO.
Risk Management and Internal Control
Adherence to the laws and principles of corporate governance is of great importance to Migros as it forms the basis for our understanding of corporate responsibility. Elimination of any irregularity or risk by our internal control system is very important for us in order to be able to undertake this responsibility. The Migros Internal Control System, defines the functional and operational risks associated with the functional and financial performance of the processes and the units. The results are analyzed independently and presented to the company’s management. The Corporate Risk Management Unit conducts its activities by engaging with the CFO and the Early Detection of Risk Committee.
Migros’ Internal Audit Department investigates and examines the activities and transactions, by consistently conducting internal audits, throughout the year. In case of any irregularities, detailed investigations are conducted in order to ensure due precautions are taken and to create recommendations on the precautions to be taken to eliminate the irregularities that may occur in the future. The Internal Audit Department reports directly to the CEO.
Migros’ Sustainability Committee assesses the legal, physical, environmental, operational and socio-economic risks and opportunities related to sustainability by bringing together the leaders of the different units of the company. Risks and opportunities addressed are prioritized according to their impact on business success and stakeholder expectations as part of the materiality analysis. Migros’ Sustainability Committee adopts socially, economically and environmentally powerful applications and focuses on performance improvement in material subjects. We follow legislative regulations which do not affect our operations at present but have a potential to have an impact in the future.
Business Ethics, Anti-Bribery and Anti-Corruption
Due to our commitment to the highest ethical standards and acting with ethics and integrity in mind in all our activities, we attach utmost importance to the prevention of corruption and bribery. Our business activities are carried out in accordance with our Code of Ethics
, Anti-Bribery and Anti-Corruption Policies
and with the support, where needed, from our Board of Directors. Migros Business Ethics, established in accordance with the Ethics Association’s independent opinions, has been published on our corporate website and in our annual reports in order to be available to all our stakeholders. All Migros employees are informed about the principles of business ethics when they start their employment with Migros.
Migros’ Code of Ethics determines Migros’ ethical approach to business life events. Migros Anti-Bribery and Anti-Corruption policies are revised periodically and any changes in the rules are communicated to all employees, suppliers and especially all business partners. Our policies have been updated in 2016 and the current policy was made public via our website. Every Migros employee is responsible for helping to prevent corruption and bribery. Any queries or concerns can be communicated via-the communication channels of the company.
Corruption and bribery issues are examined as part of a risk-based system of internal control through our risk management system. These risks and potential impacts are subject to assessment during auditing. Any internal audit findings relating to corruption and bribery or any issues related with ethical principles would be assessed by the Migros Ethics Committee, which meets on a quarterly basis with the participation of company executives. In the event a high risk is identified, it is evaluated by Migros Ethical Committee, which is composed of senior management. In addition, corruption risks of employees with high-risk jobs in terms of bribery are evaluated.
As part of our corporate governance, our company’s Audit Committee and Ethical Committee make reports and provide feedback independently to our senior management about our Anti-Bribery and Anti-Corruption Policy.
In case of any violation of Migros’ Code of Ethics, thanks to our open-door policy, our employees and other stakeholders can directly contact Migros administrators including our senior management through communication channels of the company. Potential violations can be reported by our employees anonymously. Our company adopts the policy in which employees who report malpractice are not discriminated against. Therefore, our employees cannot be held responsible for the company loss by refusing to behave unethically or behaving in accordance with Migros Codes of Ethics; these situations cannot lead to sanctions.
Employees’ violations of Migros Code of Ethics and Anti-Bribery and Anti-Corruption Policy are dealt with by the Human Resources Department and reported to the Migros Management. In case violations of these policies are by employees who are union members, the Disciplinary Committee is summoned with the participation of union representatives in accordance with the Collective Labour Agreement. Violations of Migros Code of Ethics and Anti-bribery and Anti-corruption Policies could lead to the termination of the employee’s employment contract.
As stated in our ethical rules, Migros employees follow all relevant laws and regulations and reject any material or moral incentives and gifts that may come from a third party within their area of responsibility. Migros employees are required to immediately inform their supervisors if they get into a direct business relationship where their relatives have a minority or majority share of the company which Migros engages with. Under no circumstances do Migros employees accept or offer any bribe.
We expect all our business partners including our suppliers and contractors to comply with laws and regulations and to adopt the Migros Code of Ethics along with Migros’ Anti-Bribery and Anti-Corruption Policy. At Migros, making any facilitation payments or financial contributions to political parties, politicians or any related organization is forbidden. In addition, we are fully committed to anti-discrimination and as such treat all stakeholders the same regardless of their social or cultural views or differences in their background.
Any violation regarding corruption and anti-bribery could result in termination of employment.
In the event of investigating any potential fraud, bribery or corruption, the issue is investigated and resolved immediately by following the necessary legal process and relevant stakeholders are notified as necessary.
Migros received the “Most Ethical Companies of Turkey” award given by EDMER (Centre for Ethical Values) in ETİKA (Turkey Ethics Awards) in 2014 and 2015.
Sustainability is a fundamental responsibility of all Migros employees. This responsibility is implemented via both a bottom-up and a top-down approach. Migros’ Board of Directors is responsible for setting the strategic approach to sustainability issues such as climate change, environment, biodiversity, human rights, occupational health and safety, governance and business ethics, responsible business practices and social development.
Migros’ CEO, as a member of the Board of Directors and head of execution, is responsible for execution of these strategies defined by the Board of Directors. Migros’ CEO fulfils this responsibility together with the executive team. Every senior executive decides the allocation of sustainability responsibilities in their teams through defined targets. In order to facilitate this process Migros has founded a specific organ called Migros Sustainability Committee through the participation of senior managers representing the main functions of the company and chaired by Migros Chief HR Officer. Migros’ Sustainability Committee forms a platform in which responsible management principles are discussed. Through the work of the Committee, the Migros organization integrates sustainability practices in operations, conducts business practices regarding sustainability performance, which helps to ensure our stakeholders’ expectations are met at the highest level. Migros’ Sustainability Committee tracks and analyses sustainability issues that may affect Migros’ assets, operational and commercial activities; determines indicators that will be used in performance follow-up; implements projects for achieving performance targets and the results obtained are reported to the CEO and senior management. Performance related to sustainability issues is also part of our corporate performance evaluation system.
Migros’ Sustainability Committee annually audits and monitors our Environmental Policy
activities by getting information from managers of all departments. Our Environmental Policy is known and embraced by all our employees. The managers of all departments in the Sustainability Committee foresee and monitor employees’ Environmental Policy practices. The departments help to convey the policy and educational programs, and to collaborate with internal audit as well as in setting environmental targets and in monitoring performance.