The Board of Directors is the highest decision making body of the company, consisting of a total of 8 members, responsible for making decisions and supervising management issues regarding overall management of the company. In order to secure independence and objectiveness in the decision making process, the CEO and the chairman of the board of directors are separated. This ensures mutual checks and balances between the board of directors and the management, as well as transparency in corporate management. In addition, the company organizes the board of directors with experts from each field, positioning more than 50% of the committee members as outside directors, to support the board’s decision-making by operating an internal support organization. This aims to maintain practical expertise, independence, and efficiency of the board.

The Board of Directors introduced the Board Skill Matrix (BSM) in order to reinforce trust in the logic of the company’s director candidate recommendation and process by providing stakeholders with relevant information including competencies of directors required by the company. We strive to enhance corporate value by optimally composing the board of directors and actively communicating with investors by disclosing the BSM.

Expertise, sense of responsibility, and diversity are key factors in forming the board of directors. We ensure that the board of directors is not biased towards a specific background or an occupational group, and that there are no restrictions on age or gender in appointing directors. Furthermore, we ensure that the board consists of talented persons with an array of diverse knowledge, experience, expertise, and responsibility to contribute to important decision-making in management.

The qualifications required to perform the duties of the board of directors are evaluated in finding and appointing director candidates. Candidates for the CEO position are proposed by the HR Committee, and the appointment of the CEO is confirmed through a resolution at the general shareholder’s meeting. As for outside directors, the Independent Director Recommendation Committee examines candidates for disqualifications set forth in relevant regulations such as the Commercial Act and the Enforcement Decree of the Commercial Act, as well as verifying their expertise.

The Board of Directors at SK D&D operates the Audit Committee, the ESG Committee, the HR Committee, and the Independent Director Recommendation Committee under the Board of Directors in order to enhance efficiency of management decision-making system. The authority of the Board is delegated to each committee, and the ratio of outside director appointment is specified in the regulations of each committee to ensure independence.

The Board of Directors holds regular monthly meetings as a principle in accordance with the Articles of Incorporation and the board of directors regulations. Also, ad-hoc meetings are held when necessary. The Board of Directors is responsible for independently reviewing the possible impacts of the board’s decisions on its stakeholders, and is carrying out reviews and decision-making in overall company risk management, including deliberation and approval of issues with conflicts of interest. The ESG Committee manages ESG issues, and has stipulated the contents in the Board of Directors regulations in order to address environmental and social issues At the board level. A total of 13 board meetings were held in 2022, with a 100% attendance rate.

We operate the ESG Committee to ensure efficiency of board operation. The ESG Committee reviews ESG management strategies as well as managing ESG risks. In addition to ESG risk management, the ESG Committee reviews ESG management strategies and periodically monitors related performance to review agendas for them to be reflected in decision-making by the board of directors. In particular, agendas regarding environmental management such as Net Zero implementation, management of risks such as responding to climate change, establishment of directions for eco-friendly business, and management of GHG emissions are being managed at the board level. In addition, within the ESG Committee regulations, the functions of reviewing possible ESG risk factors in the entire value chain and establishing countermeasures are specified and managed.

Specialized training is provided for outside directors in order to strengthen their expertise. In 2022, All outside directors received ESG trainings on various topics including major business-related issues and plans, and board-centered management plans, actively utilizing programs provided by external professional organizations such as the Audit Committee and accounting firms to provide training necessary for the board’s activities.

We conduct assessments of the Board and its committees to enhance the transparency of our governance. Anonymous surveys are conducted Annually for outside directors, covering five areas: Board composition, roles, responsibilities, operation, and committees under the board. Assessment results are actively used in establishment and enhancement of board regulations to improve and innovate our board operations.

The base pay of our directors is decided by comprehensively considering their position (role), expertise, and contribution to the company within the remuneration limit approved at the general meeting of shareholders. Performance pay is decided by both quantitative factors such as sales and operating profit and qualitative factors such attainment of strategic goals and leadership skills. As for inside directors, non-financial performance is included as part of KPIs to help determine final remuneration.

In addition to the financial, strategic and operational indicators included in KPIs for all executives, including the CEO, improvement tasks are derived based on the ESG materiality reviewed through the ESG committee to reflect ESG management items. In 2022, non-financial indicators such as structuring ESG infrastructure, improving organizational culture, and advancement of safety and health management system were used for assessment, and assessment results are managed in connection with compensation. We promote a sense of responsibility for creating social values through these efforts.