SK D&D advances Board-centered management to bolster the role and authority of the Board of Directors. To expand the role of the Board and improve its efficiency, we established the HR Committee, the Independent Director Recommendation Committee, and the ESG Committee under the Board. We also perform self-assessments on the Board to identify improvements, and are creating and supplementing Board-related regulations.
Composition and Operation of the Board
As the highest decision-making body mandated to execute critical corporate decisions and oversee business operations, our Board of Directors meets every month in principle and more often when deemed necessary. The Board consists of eight members in total (1 inside director, 3 non-executive directors, and 4 outside directors). To help secure the transparency and independence of decision-making, we separate the roles of the CEO and the Board Chair and ensure outside directors account for a majority of the Board.
Board Operation
| Category | 2019 | 2020 | 2021 | |
|---|---|---|---|---|
| Meetings held | 12 | 19 | 17 | |
| Agenda submitted for the Board of Directors | Agenda proposed | 34 | 45 | 65 |
| Agenda approved | 23 | 38 | 52 | |
| Agenda reported | 11 | 7 | 13 | |
| Attendance rate of the Board of Directors | Outside Director | 88% | 98% | 98% |
| Attendance | 93% | 99% | 99% | |
Actions of the Board of Directors
| Round | Date | Agenda | Approved /Pending Approval | Affirmative | Attendance of inside directors | Other non-executive directors | Attendance of outside directors |
|---|---|---|---|---|---|---|---|
| 1 | January 20, 2021 | [Submitted Issue]
[Reported Issue]
| Approved/ Reported | 6/6 | 1/1 | 3/3 | 2/2 |
| 2 | February 8, 2021 | [Submitted Issue]
[Reported Issue]
| Approved/ Reported | 6/6 | 1/1 | 3/3 | 2/2 |
| 3 | February 15, 2021 | [Submitted Issue]
[Reported Issue]
| Approved/ Reported | 6/6 | 1/1 | 3/3 | 2/2 |
| 4 | March 11, 2021 | [Submitted Issue]
[Reported Issue]
| Approved/ Reported | 6/6 | 1/1 | 3/3 | 2/2 |
| 5 | March 30, 2021 | [Submitted Issue]
| Approved | 8/8 | 1/1 | 3/3 | 4/4 |
| 6 | April 21, 2021 | [Submitted Issue]
| Approved | 8/8 | 1/1 | 3/3 | 4/4 |
| 7 | May 18, 2021 | [Submitted Issue]
[Reported Issue]
| Approved/ Reported | 8/8 | 1/1 | 3/3 | 4/4 |
| 8 | May 20, 2021 | [Submitted Issue]
| Approved | 8/8 | 1/1 | 3/3 | 4/4 |
| 9 | May 28, 2021 | [Submitted Issue]
| Approved | 7/7 | 1/1 | 2/3 | 4/4 |
| 10 | June 8, 2021 | [Submitted Issue]
| Approved | 8/8 | 1/1 | 3/3 | 4/4 |
| 11 | June 28, 2021 | [Submitted Issue]
| Approved | 8/8 | 1/1 | 3/3 | 4/4 |
| 12 | July 14, 2021 | [Submitted Issue]
| Approved | 8/8 | 1/1 | 3/3 | 4/4 |
| 13 | August 18, 2021 | [Reported Issue]
| Reported | - | 1/1 | 3/3 | 4/4 |
| 14 | September 27, 2021 | [Submitted Issue]
| Approved | 7/7 | 1/1 | 3/3 | 3/4 |
| 15 | October 13, 2021 | [Submitted Issue]
| Approved | 8/8 | 1/1 | 3/3 | 4/4 |
| 16 | November 17, 2021 | [Submitted Issue]
[Reported Issue]
| Approved/ Reported | 8/8 | 1/1 | 3/3 | 4/4 |
| 17 | December 1, 2021 | [Submitted Issue]
[Reported Issue]
| Approved/ Reported | 8/8 | 1/1 | 3/3 | 4/4 |
- As of December 31, 2021
Director Appointment Process
In identifying and appointing director candidates, we verify that they possess the qualifications required to execute their duties of the Board and appoint them at the general meeting of shareholders. It is through the HR Committee that CEO candidates are nominated and appointment proposals are made, and the appointment is made by decision at the general meeting of shareholders. For outside directors, the Independent Director Recommendation Committee assesses candidates for disqualifications specified in the Commercial Code, the Commercial Code Enforcement Decree and other applicable regulations and verifies their expertise. In the director candidate nomination process, we comprehensively consider the expertise and diversity of the Board as well as the independence of outside directors and our directors serve three-year terms.
Characteristics of Board of Directors
Composition of the Board
| Director | Name | Expertise | Position | Gender | Date of Appointment | Tenure | Career |
|---|---|---|---|---|---|---|---|
| Inside Director | Do-hyun Kim | Professional management |
| Male | Mar. 2022 | Mar. 2025 | (Current) CEO, SK D&D |
| Non-executive Director | Ki-joong Nam | Professional management |
| Male | Mar. 2022 | Mar. 2025 | (Current) Head of Management Support Office, SK Discovery |
| Jae-min Kim | Finance / market analysis |
| Male | Nov. 2018 | Mar. 2024 | (Current) VP, Hahn & Company | |
| Dong-chun Lee | Professional management | - | Male | Nov. 2018 | Mar. 2024 | (Current) VP, Hahn & Company | |
| Outside Director | Jun-cheol Kim (Board Chair) | Accounting and finance (certified public accountant) |
| Male | Mar. 2021 | Mar. 2024 | (Current) CPA, Dasan Accounting Corporation |
| Je-hyeoung Park | Law (lawyer) |
| Male | Mar. 2021 | Mar. 2024 | (Current) Attorney (Partner), Barun Law | |
| Kil-ho Lee | Accounting and finance (certified public accountant) |
| Male | 2021-11 | 2024-11 | Auditor General, K car capital | |
| Kyung-min Kim | Environment |
| Male | Mar. 2022 | Mar. 2025 | Professor, Graduate School of Environmental Studies, Seoul National University |
- As of Jul. 31, 2022
Committees under the Board
We operate the Audit Committee, the ESG Committee, the HR Committee, and the Independent Director Recommendation Committee under the Board of Directors. Each committee is delegated by the Board to perform specific functions, and we promote their professional and efficient decision-making while guaranteeing their independence by specifying the ratio of outside directors in the Rules of respective.
Board Assessment
We assess the performance of the Board to improve the transparency of our governance. Anonymous surveys are conducted on outside directors each year in the five areas of Board composition, roles, responsibilities, operation, and committees. Assessment results are used to create and supplement Board-related regulations to innovate our Board operations through continuous improvement.
Assessment Items
Board Assessment Process
Assessment Results
| Category | 2020 | 2021 |
|---|---|---|
| Board’s composition | 5.00 | 4.83 |
| Board’s roles | 4.90 | 4.56 |
| Board’s responsibilities | 4.88 | 4.81 |
| Board’s operation | 4.81 | 4.62 |
| Committees | - | 4.68 |
Board Remuneration
We determine the base pay of our directors by comprehensively considering their role, expertise, and contribution to the company through the HR Committee within the remuneration limit approved at the general meeting of shareholders. Performance pay is determined through both quantitative assessments on sales and operating profit among others as well as on qualitative assessments on the attainment of strategic goals and leadership skills. For inside directors, non-financial performance is included as part of the KPIs to help determine the final figure of their remuneration.
Remuneration Data
| Category | Total Remuneration | Average Remuneration per Person |
|---|---|---|
| Registered director | 1,852 | 1,852 |
| Outside director* | 68 | 68 |
| Members of the Audit Committee | 174 | 58 |
| Auditor | 15 | 15 |
- As of Dec. 31, 2022 / unit : KRW million
- * Outside director : Members of the Audit Committee Excluded
Expanding Disclosures and Ensuring Accessibility
To provide information to stakeholders in a diverse and transparent manner, we announce financial data, disclosures available on the electronic disclosure system, the general meeting of shareholders, and the appointment of external auditors on our website. In so doing, we ensure that corporate information that may affect our corporate value, in addition to regular disclosures, is made equally available for all shareholders. We have also stipulated disclosure management regulations (disclosure controls and operation, disclosure risk assessment and management, monitoring, etc.) to establish the completeness, fairness and timeliness of disclosures that we provide.
Voluntary Disclosures and IR Events
| Category | Unit | 2019 | 2020 | 2021 |
|---|---|---|---|---|
| Voluntary disclosures | No. of cases | 0 | 3 | 0 |
| IR Events * | No. of cases | 0 | 1 | 3 |
- * The number of IR events was calculated solely based on the ones disclosed through the electronic disclosure system (DART), and IR events are held whenever the need arises on a monthly basis without separate disclosures.
Dividend
To return our profits to shareholders and distribute such profits through monetary means and shares among others, we have stipulated relevant matters in our Articles of Incorporation and expanded our dividend policy. Matters concerning our dividend policy and dividend payments are transparently disclosed through our regular reports (business reports, quarterly reports) and the final decision are made at the general meeting of shareholders. Dividend payments are then made within one month following the final decision.
Dividend Policy
Dividend Data
| Category | Unit | 2017 | 2018 | 2019 | 2020 | 2021 | |
|---|---|---|---|---|---|---|---|
| Common shares | No. of dividend shares | 1,000 shares | 16,155 | 18,990 | 18,990 | 18,990 | 22,190 |
| Dividend per share | KRW | 600 | 600 | 600 | 600 | 800 | |
| Cash dividend yield | % | 1.87 | 2.26 | 2.06 | 1.41 | 2.56 | |
| Preferred shares | No. of Preferred shares | 1,000 shares | - | - | - | 5,200 | 2,000 |
| Dividend per share | KRW | - | - | - | 1,022 | 1,022 | |
| Cash dividend payout ratio | % | 17.85 | 21.74 | 25.37 | 25.35 | 14.85 | |
| Total dividends | KRW million | 9,693 | 11,394 | 11,394 | 16,708 | 19,796 | |
Audit Committee
We maintain the independence of the Audit Committee by ensuring that all three of its members are exempt from the possibility of being disqualified under the Commercial Code. Members of the Committee are elected in compliance with the Code and other relevant laws and regulations, and the Chair has been appointed for his/her accounting and financial expertise. To reinforce the expertise of audit operations, we provide members with relevant training on laws concerning external audits and the internal accounting control system at least once a month. The internal accounting management part supports working-level audit work and regularly communicates with external auditors to help the Committee operate as smoothly as possible.
Composition of the Audit Committee
| Position | Director | Name | Audit-related qualification |
|---|---|---|---|
| Chair | Outside director | Jun-cheol Kim (Board Chair) | CPA |
| Member | Outside director | Je-hyeoung Park | Lawyer |
| Member | Outside director | Kyung-min Kim |
External Auditor
Regular audits are conducted by external auditors to ensure the fairness and transparency of our accounting information. We have stipulated and operate external auditor appointment regulations to establish the independence and expertise of auditors in selecting external auditors.
Audit Opinion
| Business Year | Auditor | Audit Opinion |
|---|---|---|
| 2021 (Current period) | EY Korea | Unqualified |
| 2020 | EY Korea | Unqualified |
| 2019 | EY Korea | Unqualified |
Internal Accounting Control System
We have established and operate the internal accounting control system. The Chair of the Audit Committee assesses the operational status of the system and reports the results to the Board. The CEO is responsible for reviewing the effectiveness of the internal control system and managing and operating the system while reporting the results to the general meeting of shareholders, the Board and the Audit Committee. Detailed regulations and operational results are disclosed on the electronic disclosure system (DART) through our business reports and internal accounting control system reports.
Operational Performance of the Internal Accounting Control System
| Category | No. of Assessment Items | Issues Identified | Issues for Which Action Was Taken | Note |
|---|---|---|---|---|
| Company-wide control | 42 | 3 | 3 | Completed improvements on identified issues (simple non-compliant issues) |
| Transaction level control | 288 | 3 | 3 | |
| Information Technology General control | 56 | 3 | 3 | |
| Total | 386 | 9 | 9 | 100% |