Directors and Officers Liability in Türkiye: Governance, Claims and Insurance for Foreign Groups

Start with the company, the office and the alleged loss

A Turkish joint stock company is a legal person with rights and obligations separate from its shareholders, directors and officers. The board is the default management and representation body, subject to statutory exceptions and valid allocations under the Turkish Commercial Code. That starting point matters when a foreign group receives a demand addressed broadly to “the directors.” A company debt or failed investment does not by itself identify a personally liable individual. Identify the affected company, each person’s office and the asserted duty.

Corporate records may show a legal person, rather than an individual, as a board member. In that structure an individual is registered to exercise the membership on the legal person’s behalf, but those actors should not be treated as interchangeable. Article 553 liability also requires more than a title: a duty arising from law or the articles, breach through fault, damage and a legally sufficient causal link. In a 2025 decision, the Court of Cassation affirmed a result on the particular record that did not impose organ liability on the natural-person representative merely because of that capacity; it also recorded a separate causation finding. It is not a general immunity.

Foreign groups often use business titles that do not map neatly onto Turkish corporate offices. “Regional director,” “country officer,” “nominee” and “business lead” may describe reporting lines without proving registered organ status, delegated authority or personal fault. Review the articles, registry, board decisions, internal directive, powers, responsibilities and conduct. A person may hold several capacities, each with different duties and policy treatment.

Identify the claimant and owner of the alleged loss. Company loss, a shareholder’s direct loss, a shareholder’s indirect loss through diminution of the company, and creditor loss do not follow one procedural route. The requested payee may be decisive. Turkish law permits a shareholder to pursue company loss in the conditions of Article 555, but the requested compensation must go to the company. A demand that uses the phrase “shareholder loss” without explaining whose assets were reduced is incomplete.

Liability and insurance are separate inquiries. A plausible corporate claim may fall outside the issued policy, while a defence-cost or notice question may arise before any court determines liability. A certificate or premium invoice does not reconstruct the policy. The schedule, wording, endorsements, insured capacity, period, retention, limits, exclusions, notice record and any reservation of rights must be assembled before a coverage view is offered.

Board duties are duties of process as well as outcome

Article 369 requires board members and persons entrusted with management to act with the care of a prudent manager and to protect the company’s interests in good faith. The standard does not make every commercial loss negligent. A review should ask what information was available, what questions were raised, whether conflicts were disclosed, how alternatives were tested and whether the decision fell within the function actually assigned to the person. Minutes should record the material considered, not only the result.

Some governance responsibilities remain with the board. Article 375 lists non-delegable matters including top-level management, organisational design, the accounting and financial-control architecture, high-level supervision and specified statutory notifications. Operational teams may prepare reports, but policy cannot erase the listed board responsibility. The local record remains significant when headquarters supplies budgets, systems or templates.

Information rights and conflicts are part of the same architecture. Board members have statutory rights to obtain information and inspect records so that they can perform supervision. Article 393 restricts participation in deliberations when its conflict conditions are met, and Article 395 regulates particular transactions and borrowing involving board members and related persons. Group affiliation does not answer every conflict question, and different treatment is not automatically unlawful. The relationship, interest, disclosure, abstention, approval path and company interest must be documented.

Article 396 contains a non-compete rule and company remedies with special short periods. A group should not assume that an ordinary five-year corporate-liability period governs every remedy. It should identify when the company learned of the relevant activity, what business actually competed, whether consent existed and which remedy was selected. Apply the same discipline to related-party transactions and any group-company exception.

Risk governance also depends on company type. Listed companies are subject to the statutory early risk-detection committee requirement, while the mechanism for other joint stock companies may be triggered through the auditor under Article 378. Board decisions must satisfy the applicable quorum and decision method, including the written-circulation route where used. Preserve attendance, voting, the articles and circulated text before inferring invalidity or fault.

Delegation and representation solve different problems

Management delegation under Article 367 requires more than an organisational chart. The articles must authorise delegation and an internal directive must define the management organisation and functions. If management has not been validly delegated, the statutory default is that management belongs to all board members. Verify delegation before treating a group policy, employment agreement or reporting line as a complete answer.

A valid delegation can materially affect liability. Article 553 provides that an organ or person transferring a duty or authority on the basis of law is generally not responsible for the delegate’s acts and decisions unless the required care in selection was not shown. It also states that no person may be made liable for an illegality or irregularity outside that person’s control, and that this limit cannot be defeated simply by invoking supervision and care. Neither rule protects retained, assumed or non-delegable failures.

Representation concerns the company’s external dealings. The board holds representation authority unless the articles provide otherwise, and delegation must leave at least one board member authorised. Article 371 governs the scope and third-party effect of representation. Internal limits generally cannot be used against a good-faith third party outside the statutory categories. An approval matrix governs internally, but its breach may not release the company externally.

Article 371(7) creates a particular route for limited commercial proxies and other commercial assistants through a registered and announced internal directive. The provision also states a joint-liability rule for the board concerning the acts of persons appointed under that paragraph. It should not be paraphrased as liability for every act of every employee. The appointment, registered limit, actual authority and disputed act must fit the statutory structure.

The Ministry of Trade’s current company guidance explains the registry and announcement steps for this limited-representation mechanism and the narrow third-party effect of representation restrictions. The guidance is operational context; the Code and actual registry record control. Revocation, new signature rules and changes to the internal directive should be reconciled across the board decision, registry, power documents, bank mandate and communications to counterparties.

Foreign parent instructions require a Turkish group-law analysis

A foreign parent is not outside the Turkish group-of-companies regime merely because it is incorporated elsewhere. Article 195 can treat a foreign enterprise as the controlling enterprise, and the Code contains a Turkish forum rule connected with the seat of the controlled company. The legal analysis still begins with control. Examine ownership, rights, board influence and decision power; a common brand alone does not prove unlawful control.

Under Article 202, a controlling enterprise may not use control to cause the controlled company loss through the listed harmful acts without timely compensation or an equivalent enforceable counter-right. The framework addresses transaction-level interventions and, in its separate paragraph, structural decisions such as merger, division, conversion, dissolution, securities issuance and important amendments. Loss alone is insufficient; prove the instruction, control link, effect, compensation and timing.

A different rule applies in a wholly owned group. Article 203 permits instructions concerning the group’s defined and concrete policies even where an instruction could cause loss to the controlled company. Article 204 sets the boundary: instructions that clearly exceed the company’s ability to pay, endanger its existence or could cause loss of substantial assets are not permitted. A material instruction needs solvency, cash, asset-significance and local-board evidence.

Article 205 can protect local managers against company and shareholder liability for complying with an instruction that satisfies Articles 203 and 204. The protection depends on the statutory conditions; it is not a defence for every headquarters request. A reliable instruction file identifies the author, recipient, decision date, group policy, local analysis, expected benefit and detriment, payment impact, compensation or counter-right, and any escalation. Retrospective emails rarely replace a contemporaneous record.

An umbrella D&O policy and a group reporting line do not prove that the parent assumed every subsidiary liability. Control liability, a contractual indemnity and insurance are three separate questions. The first depends on the TCC group rules and conduct. The second depends on its wording and enforceability. The third depends on insured entity and person definitions, capacity, trigger, allocation, exclusions and limits. Keep them separate; a parent-policy certificate is not an admission on the claim.

Who may sue, and where should any recovery go?

The company may seek compensation for its own loss from persons who meet the TCC liability conditions. A shareholder may also pursue company loss under Article 555, but the shareholder must request payment to the company. This route should not be confused with a shareholder’s own direct loss. Read the pleading, affected asset and relief together, not the claimant’s label.

The Court of Cassation’s 2024 decision in file E.2023/1202, K.2024/4540 illustrates why the destination of recovery matters. On that record, the courts treated the complained-of mismanagement loss as an indirect company loss and the requested personal payment as inconsistent with Article 555. It does not bar every shareholder action; it confirms that company loss requires the statutory route and payee.

Bankruptcy changes control of the company-loss claim. Article 556 gives the bankruptcy estate priority, with a secondary route for creditors or shareholders if the estate does not act. Article 245 of the Enforcement and Bankruptcy Code separately provides a mechanism for assignment of an estate claim in its own conditions. A creditor should not be told that company insolvency automatically creates a direct claim against all directors. Review the estate decision, assignment, loss and any direct-loss or guarantee basis.

Capacity at the filing date can also matter. In a 2026 official full-text decision, the Court of Cassation affirmed a standing-based rejection on a record where the plaintiffs had transferred their shares before bringing the action. The result is tied to that record and does not govern every former shareholder, direct loss or later transfer.

A useful claim matrix states, for each claimant and defendant, the relevant entity, office and dates; the duty relied on; the act or omission; the evidence of fault; the owner and calculation of loss; the causal theory; and the requested payee. This often exposes demands that combine several losses without identifying their routes.

Multiple defendants, discharge and limitation need separate files

When several persons are responsible for the same loss, Article 557 applies differentiated solidarity. Each person’s position is assessed by reference to the loss attributable to that person, fault and surrounding circumstances. The rule does not assume equal responsibility. A court may, when properly requested, determine the relevant shares under the statutory procedure. Minutes, assigned functions, attendance, conflicts, information received and individual acts should be mapped defendant by defendant.

Balance-sheet approval and express discharge are not the same document. Under Article 424, approval may have the discharge effect described there unless the resolution states otherwise. That effect does not arise where the balance sheet omits or inadequately states matters, or contains matters obstructing a view of the company’s true condition, and the conduct was conscious. The discharge analysis includes statements, explanations, audit material and information available to voters.

An express discharge resolution affects company and shareholder claims only within Article 558 and the disclosed material facts it covers. Shareholders who did not consent may face the special six-month period for the covered company-loss route. Annual minutes are not a universal release of unknown conduct, third-party rights or withheld facts.

Article 560 provides a two-year period from knowledge of the loss and the liable person and an outer five-year period from the loss-producing act, with a longer criminal limitation where the act constitutes an offence and that longer period applies. Check the claim, act, knowledge, interruption and criminal link. An independently applicable tort claim under the Code of Obligations has its own elements and period; it cannot be used casually to avoid the special corporate regime.

Limitation, discharge, settlement, indemnity and insurance remain distinct defences or allocations. A discharge may affect a company claim without deciding policy coverage. An indemnity may allocate defence costs without binding an injured third party. A limitation defence for one cause of action may not answer another. Keep separate chronologies and legal tests.

Limited companies require their own manager map

Limited companies use the manager structure in Articles 623 and 629. Do not import every joint stock company rule by relabelling a board member as manager. At least one shareholder must hold management and representation authority within the Article 623 structure, while the articles, appointment decision, any legal-person manager representative and registry entry determine who held the office at the relevant time.

Article 625 lists managers’ non-transferable duties, including top-level management, organisational design, the accounting and financial-control architecture and supervision. Article 626 imposes care, loyalty and a competition rule. Article 627 addresses equal treatment of shareholders within its conditions. Duty, conduct, fault, loss and causation still require proof. A group title or signature authority alone does not settle those elements.

Article 644 expressly imports specified joint stock company liability provisions, including the Article 553 to 561 framework, into limited companies. The cross-reference does not import every board rule. The starting point remains the limited-company provisions and the exact rule made applicable. The role matrix should distinguish a registered manager, legal-person manager representative, authorised signatory, employee, shareholder, de facto decision maker and parent-company officer.

A person can move between those roles during the disputed period. For each material decision, record the capacity, source of authority, reporting line, knowledge and participation at that time. The chronology also matters because a policy may distinguish offices, employees, entity cover and capacity.

Read the D&O policy from the trigger outward

Turkish liability-insurance law begins with the contracted risk. Article 1473 provides a default under which the insurer pays, up to the contractual amount, for liability arising from an event occurring during the insurance term even if damage emerges later, unless the contract provides otherwise. A D&O wording may instead use a claims-made or other agreed trigger. No trigger conclusion should be offered from the Code alone.

For insurance concerning enterprise-related liability, Article 1473(2) extends cover by default, unless otherwise agreed, to the insured’s representative and persons working in management, supervision or the enterprise within the provision. The issued wording may define insured persons differently. Match entity and insured-person definitions to capacity and alleged conduct.

Article 1409 ties the insurer’s obligation to the contracted risk and contains the statutory burden rule for an asserted exclusion. Exclusions still require analysis. Conduct exclusions, insured-versus-insured language, professional-services restrictions, prior-matter clauses, territorial provisions and capacity terms must be read with severability and final-adjudication wording. Allegations should not be restated as established dishonest or intentional conduct.

Risk disclosure at inception is governed by Articles 1435 and 1439, while Articles 1444 and 1445 address material risk aggravation during the term. Proposal forms, questions, answers, knowledge, corporate transactions and insurer responses should be collected. Ownership, governance or business changes are not automatically material; the statute and policy record control.

Article 1474 covers reasonable expenses concerning the asserted claim and requires an advance on the insured’s request, while over-limit expenses depend on the contract as described in the provision. D&O practice may raise additional questions about consent, panel counsel, allocation between covered and uncovered matters, retention and advancement. Those questions require the wording and insurer’s position.

The practical first pass is a policy timeline. It should show the alleged conduct, continuity and prior-pending dates, inception and renewal, change of control, circumstance notice, claim, later allegations, defence appointments and insurer communications. Preserve every wording and endorsement. A current schedule with an old wording can misstate trigger or capacity.

Notice, defence, exclusions and recovery

Article 1475 requires notice of events capable of creating liability within ten days and, unless otherwise agreed, immediate notice of a demand. The policy may contain additional wording for claims, circumstances, related claims and reporting channels. The team should identify which communication is said to be the event, circumstance or claim and preserve delivery evidence. No actual deadline is calculated here.

Article 1476 governs the insurer’s response after notice, assistance in the defence and settlement consequences. The notice record should show whether the insurer assumed the defence, reserved rights, requested information, approved counsel or addressed a proposed settlement. Liability, defence and coverage positions serve different purposes. They should be reviewed before a company communicates with a claimant or seeks consent.

Article 1477 excludes loss where the insured intentionally caused the event giving rise to liability. The allegation and the final legal finding are not the same thing. D&O wordings may address final adjudication, severability or treatment of other insured persons, and those terms matter. An allegation of intent does not by itself end all cover.

The injured person has a direct action against the insurer within Article 1478, subject to the applicable policy limitation, cover, limits, exclusions and defences. The placement and claim record still identify the relevant insurer, policy year and insured person.

Following payment, subrogation under Article 1481 may allow the insurer to pursue the responsible party within the statutory conditions and amount. Waivers, insured status, group relationships and the actual payment require review before recovery is asserted. Article 1482 states a ten-year period from the insured event for compensation claims directed to the insurer under this liability-insurance part. Corporate limitation, notice and direct action remain separate.

Insurance should therefore be managed as a live workstream, not a final appendix to the merits case. Early steps include preserving all policies, giving carefully framed notice without conceding liability, identifying defence-cost arrangements, documenting insurer communications and avoiding a settlement that disregards consent terms. No step guarantees cover, advancement, approval or recovery.

D&O placement and capital-markets reporting

Article 361 addresses insurance for loss board members may cause to the company through fault. Where cover exceeds the stated 25 percent capital ratio, it provides for SPK bulletin disclosure for public companies and additional stock-exchange bulletin disclosure where the shares are exchange traded. It does not require every Turkish company to buy D&O cover.

Corporate Governance Principle 4.2.8 describes insurance above 25 percent of company capital and KAP disclosure within its governance framework. The SPK reporting guide treats the principle as a comply-or-explain item and gives cover below the ratio as an example of partial compliance. It is neither a private-company minimum nor evidence of claim coverage.

The SPK guide also addresses group umbrella policies. Its answer calculates the reporting ratio against the capital of the company completing the form and calls for supporting explanation. The reporting calculation does not allocate limits or confirm claim coverage.

The SEDDK general-conditions directory checked on 29 September 2026 did not display a dedicated directors-and-officers liability heading. Recheck that dynamic observation before publication. It does not prove that a proposed wording is valid or invalid. General conditions for professional liability listed on the page should not be silently substituted for a D&O policy unless the issued contract expressly incorporates them.

A policy audit should record insured persons and entities, outside directorships, capacity, insured-versus-insured language, conduct exclusions, severability, prior matters, related claims, notice, defence and settlement control, allocation, retentions, limits, territory, jurisdiction, change of control and runoff. The list is a review framework, not a coverage conclusion.

Evidence, urgent protection and document discipline

Civil claims are proved through the applicable burden rules. Article 190 of the Code of Civil Procedure generally places the burden on the party deriving a legal result from a fact. Article 199 recognises written, visual, electronic and similar information-bearing materials as documents. Preserve native files and context, not only screenshots or printouts.

Articles 219 and 220 govern document production and consequences that may follow from non-production. Article 222 addresses the evidential position of commercial books within its conditions. Board packs, minutes, internal directives, registry documents, instruction records, financial models, approvals, conflict disclosures, policy versions, notices and insurer correspondence should be collected with a documented chain of custody. Control relevance, custody, authenticity, confidentiality, personal data and trade secrets.

Interim relief is available only within statutory conditions. An injunction under Articles 389 and 390 requires the relevant risk and approximate proof; security, proportionality, jurisdiction and the requested measure matter. Evidence preservation under Articles 400 and 401 likewise requires the stated legal interest and urgency. Neither route permits speculative discovery or a promised result.

A cross-border collection may also involve personal-data and employment rules beyond this article. The evidence plan should identify who will collect, review, host and transfer material, and should avoid copying unrelated mailboxes or devices. For a focused discussion of transfer routes and vendor controls, see the firm’s Türkiye KVKK compliance guide for global companies. Apply that separate framework to the facts.

Evidence discipline is especially important for a foreign parent instruction or a D&O notice. Preserve original timestamps, the decision chain, versions, recipients, approvals and later amendments. A clean chronology should distinguish the underlying conduct, company knowledge, claimant knowledge, discharge, demand, policy event, circumstance notice, claim notice and insurer response. Mark missing dates as unknown.

Forum, governing law and a practical response sequence

Article 561 permits a corporate-liability action in the commercial court at the company’s seat. International jurisdiction generally follows domestic territorial rules through Article 40 of the Private International Law Act. A foreign-court agreement for a foreign-element obligation is governed by Article 47 and cannot displace exclusive Turkish jurisdiction. Review the duty, defendant, seat, tort place, arbitration and relief before stating a forum.

Contractual choice of law under Article 24 may govern an indemnity or another contractual obligation within its scope. It does not automatically determine the law governing a separate Turkish corporate duty or a third-party claim. Characterisation and mandatory rules remain relevant. A foreign judgment ordinarily needs recognition or enforcement under Articles 50, 54 and 58 before it produces the relevant Turkish effect, with finality, jurisdiction, public order, service and defence rights tested on the actual record.

The first response document should freeze unsupported deadline assumptions. Build separate chronologies for the corporate act, knowledge, alleged loss, discharge, demand, bankruptcy, policy inception, event, circumstance, claim and insurer response. Use authenticated dates. The two-year, five-year, six-month, ten-day and ten-year rules discussed above serve different questions and should never be merged into one “limitation date.”

Next, reconcile the governance record: articles, registry entries, appointment and resignation documents, board and shareholder resolutions, internal directives, powers, committee mandates and actual reporting lines. Then build the claim matrix and the policy matrix. Corporate analysis need not wait for the insurer; coverage should not assume the merits. Where a foreign parent instruction is involved, add the group-policy rationale, local solvency review and compensation record.

Finally, decide what needs immediate protection. That may include targeted document preservation, a notice, a response to a demand, an injunction analysis, evidence preservation or a bankruptcy-estate step. Each action needs its own authority, forum and evidence. Publication-day legal checks, a policy-specific review and professional-rules clearance remain separate from this local draft. No court result, limitation defence, release, personal-liability finding or insurance outcome is assured.

A board-facing file should make uncertainty visible. It should state what is established, disputed, inferred and still missing. A registry entry may establish a formal office without proving participation. A minute may prove attendance without proving knowledge of an omitted fact. A policy may name a company without confirming that every person, capacity and claim is insured. Keep those propositions separate.

The governance and insurance workstreams should meet at defined points: insured capacity, notice, defence control, document access, settlement authority and recovery rights. Do not merge them. Counsel analysing Article 553 may need a broader factual record than the insurer initially requests, while the insurer may need policy-period and related-claims material that does not decide underlying fault.

For multinational groups, the practical sequence is entity and role mapping, preservation, governance reconstruction, loss and standing analysis, limitation chronology, policy notice and coverage review, followed by any urgent court or estate step. The English guide to setting up a company in Türkiye can assist with structural context, but it does not replace the post-formation liability analysis in this article.

All dynamic authorities should be refreshed before an article or advice is used: consolidated legislation, SPK scope and reporting guidance, the SEDDK directory, Ministry registry guidance and the availability and full wording of the cited decisions. Research completion is not a professional-rules clearance, a filing decision or authority to publish.

Frequently asked questions

Official sources

• Turkish Commercial Code, Law No. 6102
• Turkish Code of Obligations, Law No. 6098
• Code of Civil Procedure, Law No. 6100
• Enforcement and Bankruptcy Code, Law No. 2004
• Private International Law Act, Law No. 5718
• SPK Corporate Governance Communiqué II-17.1
• SEDDK insurance general-conditions directory
• Ministry of Trade: Trade Registry and MERSIS
• Ministry of Trade: Company information and representation guidance
• SPK Corporate Governance Reporting Guide and FAQ
• Court of Cassation, 11th Civil Chamber, E.2023/1202, K.2024/4540
• Court of Cassation, 11th Civil Chamber, E.2023/6617, K.2025/616
• Court of Cassation, 11th Civil Chamber, E.2025/4935, K.2026/2029