Board Members’ Right to Information and Inspection

Authors: Corporate Law Department, Atty. Mustafa Şahin

Introduction

In joint-stock companies, the board of directors not only serves as the body responsible for the management and representation of the company, but is also required to oversee that the company’s activities are conducted in accordance with the law, its articles of association and the interests of the company. This duty requires board members not merely to attend meetings and cast votes, but also to assess the matters brought before them from financial, legal and operational perspectives, question management and seek further clarification where necessary. A board member’s ability to discharge these responsibilities depends on having access to accurate and timely information concerning the company’s affairs and transactions that is sufficient to support an informed decision.

Accordingly, the right to information and inspection regulated under Article 392 of Turkish Commercial Code No. 6102 (the “TCC”) is not an incidental privilege granted to board members, but a fundamental corporate governance mechanism enabling them to perform their management and oversight duties. Under Article 369 of the TCC, board members are expected to perform their duties with the care of a prudent manager and to safeguard the company’s interests in accordance with the principles of good faith. In most cases, these obligations cannot be properly discharged without an informed decision-making process.

The scope of the right to information and inspection differs depending on whether it is exercised before, during or outside a board meeting. The stage at which and manner in which the right is exercised must therefore be considered separately, taking into account the role of the chair of the board in the flow of information, matters such as trade secrets and the protection of personal data, and the remedies available where a request is refused.

I. Legal Nature of the Right and Its Relationship to Board Members’ Liability

Article 392 of the TCC grants the right to information and inspection to each board member individually. Its exercise does not require a prior board resolution, the support of other board members or the attainment of a particular majority. Nor may the chair require the requesting member to secure the support of other members. Whether a member serves in an executive capacity, qualifies as an independent member, has been nominated by a particular shareholder group or has been assigned responsibility for a particular area under the board’s internal division of duties does not affect the existence of this right arising from board membership.

The fact that the right attaches to board membership does not mean that a board member may use the information obtained in accordance with the instructions of the shareholder or shareholder group that nominated the member. A board member serves within the corporate organ and obtains access to information for the purposes of the management and oversight of the company. Accordingly, confidential information obtained through board activities may not, as a rule, be disclosed to third parties, including the shareholder that nominated the member.

Pursuant to Article 392/6 of the TCC, a board member’s rights to information and inspection may neither be restricted nor abolished. The articles of association or a board resolution may not narrow the scope of the statutory right, make its exercise unduly burdensome or render it ineffective in practice. Conversely, the right may be expanded and its exercise facilitated by providing regular reports to board members, ensuring that information requests are promptly addressed through a designated corporate channel or granting broader inspection rights than those prescribed by law.

There is a direct relationship between the right to information and a board member’s liability. Where a board member becomes aware that they do not know the material aspects of a matter before them or that the information provided is insufficient, participation in the decision-making process without seeking further clarification may be relevant to the assessment of the member’s duty of care, depending on the circumstances. However, the mere fact that information has been requested does not provide an automatic safe harbour from liability. The scope and timing of the request, the nature of the response, the steps taken by the member to remedy the information deficiency and the circumstances surrounding the decision must be considered together.

II. Access to Information Prior to a Board Meeting

Article 392 of the TCC principally regulates the right to information by distinguishing between its exercise during and outside board meetings. Nevertheless, the preparatory stage before a meeting is of particular importance if board members are to assess the agenda items properly. Presenting the decision materials to members for the first time at the meeting may prevent the right from being exercised in accordance with its purpose, particularly where the matter is extensive or technically complex.

The connection between the requested information and the agenda should not be interpreted narrowly when determining the scope of the information to be provided before the meeting. In the case of an investment, not only the relevant agreement but also its financial implications, financing structure, regulatory requirements and principal risks may be material. In the case of significant litigation, the current risk assessment and likely outcomes may be as relevant as the court filings. Similarly, in an acquisition, due diligence findings and post-transaction obligations may be as important as the legal documentation. Board members must therefore be provided with all information and documents necessary to form an informed view on the agenda item in a coherent form that allows effective review.

“Sufficient time” does not mean the same fixed period for every matter. Whether the period is reasonable depends on factors such as the volume of the documents, the complexity of the transaction, the potential impact of the decision on the company and whether the members may require specialist assistance. A short report concerning an ordinary matter and a financing agreement that may affect the company’s financial structure over the long term cannot reasonably be subject to the same preparation period. Even where a material document has formally been shared, its delivery immediately before the meeting should not be regarded as sufficient if the member has no genuine opportunity to assess its contents.

For publicly held companies falling within the scope of the Corporate Governance Communiqué (II-17.1), this approach is expressly reflected in a separate rule. Pursuant to Principle 4.4.2 of the Corporate Governance Principles annexed to the Communiqué, the chair of the board is responsible for ensuring that information and documents relating to the agenda items are made available to all board members sufficiently in advance of the meeting in order to ensure an equal flow of information. This principle is particularly important in preventing information asymmetry between executive members and members who are not involved in the company’s day-to-day management from undermining the board’s decision-making process.

III. Right to Information and Inspection During Board Meetings

A board meeting is the stage at which the right to information and inspection may be exercised most extensively. Pursuant to Article 392/1 of the TCC, each board member may request information, ask questions and conduct inspections in relation to all affairs and transactions of the company. A member’s request for any book, book entry, agreement, correspondence or other document to be brought before the board, examined and discussed by the board or its members, or for information to be obtained from a manager or employee on a particular matter, may not be refused.

Article 392/2 of the TCC also makes clear that the obligation to provide information during a meeting does not rest solely with the other board members. Persons entrusted with the management of the company and committees established under the board are required to answer the questions raised and provide the necessary explanations. At this stage, a request for information is neither subject to the permission of the chair nor conditional upon the approval of the board majority.

The scope of the right exercised during a meeting is not limited to the agenda items. The statutory reference to “all affairs and transactions of the company” allows a member to request information concerning a company matter that is not on the agenda. However, obtaining information on a matter that is not on the agenda and immediately adopting a resolution on that matter are separate issues. Compliance with a request for information does not mean that a resolution may be adopted at the same meeting without first considering the requirements governing the convening of the meeting, the agenda and the decision-making procedure.

The mere physical or electronic delivery of information to a member is not sufficient. The information provided must be timely, accurate, comprehensible, fit for purpose and genuinely responsive to the question raised. Providing a large volume of documents without any summary, classification or context may, in certain circumstances, amount only to formal compliance with the obligation to provide information. If the fundamental assumptions, principal risks and likely outcomes of the decision are not explained, a mass of raw data may not constitute information that enables the member to make an informed decision.

It is advisable for material or extensive information requests to be recorded in the meeting minutes, both for the corporate record and for any subsequent liability assessment. Where the information cannot be provided during the meeting, the reason for its unavailability and the date by which it will be provided should be recorded. If the request is refused or the questions remain unanswered, the member’s request, objection and, where applicable, the grounds for the dissenting vote should be expressly recorded. Depending on the circumstances, requesting that the decision be deferred due to insufficient information may also constitute a prudent approach.

IV. Right to Information and Inspection Outside Board Meetings

Information requests made after a board meeting are, as a rule, subject to the regime under Article 392/3 of the TCC governing requests made outside meetings, even where they relate to a matter discussed at the meeting. Accordingly, with the permission of the chair, each board member may obtain information from persons entrusted with the management of the company regarding the course of business and specific matters. Where necessary for the performance of the member’s duties, the member may also request that the chair make the company’s books and files available for inspection.

The “course of business” refers to the general development and current status of the company’s activities. This may include sales performance, cash flow, deviations from budget targets, the company’s financial position, significant personnel movements, market conditions and changes in the risks affecting the company. “Specific matters”, on the other hand, concern a particular transaction or event, such as an agreement, investment, payment, lawsuit, financing transaction, administrative investigation or personnel decision. Where direct inspection of the books and files is requested, it must additionally be assessed whether the inspection is necessary for the member to perform their duties.

The TCC does not prescribe a specific form for requests made outside board meetings. Nevertheless, a written request should be preferred to ensure that its scope, date and outcome can subsequently be established. Clearly identifying the information or document requested, explaining the connection between the request and the member’s board duties and, particularly where the inspection of books or files is sought, setting out why the inspection is necessary will facilitate a prompt and proper assessment of the request.

The right to information does not authorise a board member to issue operational instructions directly to company employees or interfere with day-to-day management. As a rule, the flow of information between a board member and the company’s managers or employees outside a meeting must take place with the permission of the chair and through the company’s established corporate processes. Likewise, the right to inspect books and files does not entail an unrestricted right to take possession of the company’s original records and remove them from the company’s premises. The inspection may be conducted at the company’s registered office, through a secure digital environment or subject to access and copying controls. However, the measures adopted must not make the exercise of the right impossible in practice.

V. Trade Secrets, Confidentiality, Personal Data and Conflicts of Interest

Trade secrets must be assessed differently in the context of a board member’s right to information than in the context of a shareholder’s right to information. A board member forms part of the company’s management body and may need access to sensitive information, including trade secrets, in order to perform their duties. The fact that the requested information constitutes a trade secret does not, in itself, justify a categorical refusal. In return, the member is required to use the information obtained solely for the purposes of the management and oversight of the company, refrain from sharing it with third parties and avoid disclosing it in a manner that may harm the company’s interests.

The protection of personal data, confidentiality obligations owed to third parties and cybersecurity requirements do not entirely displace the right to information. These considerations may affect the manner in which the information is provided and the security measures to be applied. Measures such as maintaining access logs, using a secure data room, restricting copying or redacting personal data that is irrelevant to the decision may be appropriate in the circumstances. However, such measures must not prevent the member from accessing the substance of the information required or reduce the right to a merely theoretical entitlement.

The right to information must be exercised in accordance with the principle of good faith and its intended purpose. A request aimed solely at satisfying personal curiosity, one that unnecessarily disrupts the company’s activities, is manifestly intended to cause harm or has no connection whatsoever with the member’s board duties may be taken into account when considering permission for an out-of-meeting request. Nevertheless, the chair’s discretion is not unlimited, and the reasons for refusal must be specific, objective and capable of review.

Where a board member’s personal interests conflict with those of the company, the prohibition on participating in deliberations under Article 393 of the TCC must also be observed. The existence of a conflict of interest should not be interpreted as a general restriction that automatically extinguishes the right to information in every case. However, the scope of the request, the manner in which the information is provided and the level of access should be determined on a case-by-case basis, taking into account the nature of the conflict, the company’s interests and the member’s position in the relevant decision-making process.

VI. Position of the Chair and Equal Flow of Information

The chair of the board is not a hierarchical superior vested with unfettered authority over information requests, but the person responsible for ensuring the orderly functioning of the board and the flow of information necessary for its members to perform their duties. Ensuring that documents are prepared in a timely manner before meetings, questions raised during meetings are answered and requests made outside meetings are assessed within a reasonable time all form part of the chair’s responsibilities concerning the operation of the board. The chair’s authority to approve out-of-meeting requests must not be converted into an arbitrary gatekeeping mechanism that obstructs or renders ineffective the right to information.

Nor does the chair’s position within the board mean that the chair enjoys a broader and unrestricted right to information than the other members. Pursuant to Article 392/5 of the TCC, the chair may not obtain information outside board meetings or inspect the company’s books and files without the board’s permission. If the chair’s own request is refused, the chair must also pursue the remedies before the board and the court prescribed by law. This provision clearly demonstrates that the chair occupies the position of “first among equals” within the board.

An equal flow of information does not require all members to be granted identical operational access at all times. The division of duties, committee memberships, executive responsibilities and specific conflicts of interest may justify differences in the manner in which certain information is accessed. The essential requirement is that no arbitrary distinction be created between members who will assume responsibility for the same board resolution with respect to information capable of affecting its outcome. In particular, where non-executive and independent members do not have timely and sufficient access to the material information underlying a decision, formal equality within the board may be transformed into substantive inequality.

VII. Refusal of an Information Request and Available Remedies

Pursuant to Article 392/4 of the TCC, if the chair refuses a member’s request to obtain information, ask questions or conduct an inspection, the matter must be brought before the board within two days. If the board does not convene or refuses the request, the member may apply to the commercial court of first instance at the place where the company’s registered office is located. The court may examine and decide the request on the basis of the case file, and its decision is final. The same remedy is available, through the cross-reference in Article 392/1, where a request made during a meeting—which cannot lawfully be refused under that provision—is nonetheless denied.

The amendment introduced to Article 392/7 of the TCC by Law No. 7511 in 2024 is also important in relation to convening the board. Each member may request in writing that the chair convene the board. Upon the written request of the majority of the members, the chair is required to convene the board so that the meeting is held no later than thirty days from receipt of the request. If the meeting is not convened within this period or the chair or deputy chair cannot be reached, the requesting members may issue the call directly. The articles of association may also provide for a different procedure for convening the board. Although this mechanism does not displace the special two-day period under Article 392/4, it provides an additional means of giving effect to the majority’s will where the chair prevents the board from convening.

A member whose request has been refused should document both the request and the refusal in writing, request the reasons for the refusal and ask for the matter to be brought before the board within the statutory period. If the board also refuses the request, the member’s dissent and the reasons for it should be recorded in the meeting minutes. The member should also expressly state that the matter could not be properly assessed due to insufficient information, as this may be significant in any subsequent liability assessment.

No automatic conclusion can be drawn between the obstruction of access to information and the liability of a board member. A member’s timely submission of reasonable and necessary requests, objection to the refusal and use of the remedies required by the circumstances will be taken into account when assessing liability. Conversely, the liability of the chair or the relevant managers who unjustifiably obstruct the flow of information may also arise, depending on the circumstances.

Conclusion

Board members’ right to information and inspection is a fundamental element not only of transparency and accountability in the management of joint-stock companies, but also of the individual liability regime applicable to board members. During board meetings, members are granted broad powers to obtain information, ask questions and conduct inspections concerning all affairs and transactions of the company. Outside meetings, the exercise of the right is structured by the requirement to obtain the chair’s permission and, in relation to the inspection of books and files, by the necessity criterion. This distinction seeks to place the out-of-meeting flow of information within an institutional framework while preserving the substance of the right.

An effective board must provide its members not only with the wording of the proposed resolution, but also with the full body of information on which the decision is based. The role of the chair is not to keep this flow of information under control, but to ensure that it takes place in a timely and equal manner. Board members, in turn, are expected to seek further clarification when they identify an information deficiency, place the necessary objections on record and, where required by the circumstances, pursue the available remedies before the board and the court.

From the company’s perspective, the soundest approach is to treat the right to information as an ordinary part of board culture rather than as a remedy invoked only after a dispute has arisen. Information that is shared in a timely manner, addresses the substance of the decision and can be accessed securely not only enables board members to perform their duties properly, but also enhances the quality of the decisions taken and strengthens the company’s corporate resilience.