# MADDE 393
Board Member Conflict of Interest Rules

🔍 What Does This Article Mean?

Article 393 of the Turkish Commercial Code No. 6102 prevents a board member from taking part in deliberations where the company's interests conflict with that member's own personal interests outside the company, or with the personal and non-company interests of the member's parents, children, spouse, or blood and marriage relatives up to the third degree. This covers more than the obvious cases: a conflict can arise through a child's business or a brother-in-law's venture, not only through the director's own firm. The prohibition also applies when good faith requires the member to stay out of the discussion, even if no relative is directly involved.

If there is doubt about whether a conflict exists, the issue is decided by the remaining board members, and the interested member may not vote even on that preliminary question. Crucially, the member cannot hide behind the board's ignorance: the duty to disclose the conflict and withdraw belongs to the director personally. The board decision must then state why the member was absent from the deliberation and what transaction was discussed.

The law does not automatically invalidate the contract or the resolution. Instead, it focuses on liability. If the company suffers damage because a conflicted member participated, that member, the members who knowingly failed to object, and the members who voted to let the director participate are jointly liable for compensation.

💡 Application in Commercial Life and Registry Processes

Consider a three-member board of an industrial company. One director also owns a packaging company, and the agenda item is selecting next year's packaging supplier. The board chair must immediately exclude that director from the discussion and the vote. If the chair is unaware of the packaging firm, the interested director must disclose it himself. Staying silent and merely abstaining is not enough; he must physically leave the deliberation or, at minimum, take no part in the discussion.

In daily practice, this issue often surfaces when board minutes are submitted to the trade registry, notaries, or banks. For instance, a bank loan requiring a board guarantee, or a share transfer requiring registration, may be challenged later if the minutes fail to show why a particular director was excluded. A clean, complete minute entry protects the company and its shareholders from lengthy disputes.

Because board resolutions in Turkey are not always filed individually with the registry, many entrepreneurs assume they will never be reviewed. But when a merger, capital increase, or branch establishment is registered, the relevant board minutes are examined. Missing conflict-of-interest records can trigger rejection or expose directors to claims. For practical monitoring of such obligations, platforms like SicilAI can help directors keep resolution and disclosure requirements on track before the paperwork reaches the registry.

⚠️ Risks to Watch Out For

• Treating abstention as sufficient. The conflicted member must not participate in the negotiation or discussion at all, not merely refrain from voting.
• Failing to record the reason for non-participation in the board minutes. Paragraph (3) makes this mandatory, and a missing record weakens the company's position in litigation.
• Overlooking relatives by marriage. The third-degree limit includes not only blood relatives but also in-laws, such as a brother-in-law or a spouse's uncle.
• Assuming that no one knew about the conflict removes liability. The interested director's obligation to disclose applies regardless of the other members' knowledge.
• Allowing the chairman or another non-interested member to pressure the conflicted director to stay "just for information." Even presence during deliberation can violate the law and create joint liability.