ABSTRACT
This chapter surveys corporate governance and corporate social responsibility practices (CSR) of large Turkish firms. Based on a broad range of country-level indicators, Turkey has a weak governance regime that provides investors little protection against expropriation by insiders. These weaknesses have led to a small and illiquid equity market, where traded companies exhibit highly concentrated and centralized ownership structures. The separation of ownership from control was achieved through pyramidal and other complex ownership structures. There is no active market for corporate control given the opaqueness and concentrated ownership of listed companies. There is also no market for large control stakes in a way that disciplines poor performance. Critically the Turkish economy is dominated by a strong presence of diversified family-controlled business groups, and founding families play an important role in defining business group strategies. Research on CSR remains limited in Turkey, and the concept of philanthropy is often used interchangeably with CSR. One driver of corporate prosocial behavior seems to be the need of big business owners to achieve social legitimacy and to construct a moral identity.
