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Governance

Composition and Operation of the Board

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

Category201920202021
Meetings held121917
Agenda submitted for the Board of DirectorsAgenda proposed344565
Agenda approved233852
Agenda reported11713
Attendance rate of the Board of DirectorsOutside Director88%98%98%
Attendance93%99%99%

Actions of the Board of Directors

RoundDateAgendaApproved /Pending ApprovalAffirmativeAttendance of inside directorsOther non-executive directorsAttendance of outside directors
1January 20, 2021

[Submitted Issue]

  1. 1.Approval of issuance limit of electronic short-term bonds
  2. 2.Comprehensive approval of internal transactions between directors and the Company in 2021 by the Board of Directors

[Reported Issue]

  1. 1.Report on internal transactions performance between directors and the Company in 2020
  2. 2.Report on results of compliance management activities
Approved/ Reported6/61/13/32/2
2February 8, 2021

[Submitted Issue]

  1. 1.Promotion of Seocho Office development project
  2. 2.Promotion of Yongin Gongse-dong logistics center development project
  3. 3.Deliberation of large-scale internal transactions for Yongin Baekam logistics center investment
  4. 4.Deliberation of large-scale internal transactions for Sinchon 2 rental house development project
  • Transfer of real estate buyer status and service contractor status, etc.
  • Loan of funds
  1. 5.Change of business plan for Yeoksam rental house development project

[Reported Issue]

  1. 1.Report on business plan for 2021
Approved/ Reported6/61/13/32/2
3February 15, 2021

[Submitted Issue]

  1. 1.Conclusion of stock sales contract for Yongin Baekam logistics center investment
  2. 2.Approval of 17th financial statements (including the statements of appropriations of retained earnings) and the consolidated financial statements
  3. 3.Determination of cash dividends
  4. 4.Approval of sales report
  5. 5.Adoption of electronic voting system to the General Meetings of the Shareholders

[Reported Issue]

  1. 1.Report on inspection of internal accounting management system operation in 2020
Approved/ Reported6/61/13/32/2
4March 11, 2021

[Submitted Issue]

  1. 1.Convocation of the 17th Annual General Meeting of Shareholders and approval of the submitted agenda
  2. 2.Predetermination of order of acting Chairperson for the 17th Annual General Meeting of Shareholders
  3. 3.Amendment to the Regulations of the Board of Directors
  4. 4.Deliberation of company bond issuance
  5. 5.Deliberation of internal transactions between directors and the Company

[Reported Issue]

  1. 1.Report on inspection of internal accounting management system operation in 2020 (final report on findings)
  2. 2.Report on evaluation of internal accounting management system operation in 2020
  3. 3.Report on evaluation of the Board activities in 2020
Approved/ Reported6/61/13/32/2
5March 30, 2021

[Submitted Issue]

  1. 1.Adoption of the Regulations of the Audit Committee
  2. 2.Amendment to internal accounting management regulations
Approved8/81/13/34/4
6April 21, 2021

[Submitted Issue]

  1. 1.Provision of commitment to responsible commencement and completion of Gunpo Complex
  2. 2.Conclusion of loan agreement and other financial contracts for Myeongdong office building remodeling business
  3. 3.Deliberation of issuance of FRN (Floating Rate Note)
Approved8/81/13/34/4
7May 18, 2021

[Submitted Issue]

  1. 1.Deliberation of internal transactions between directors and the Company
  2. 2.Approval of KPI for 2021

[Reported Issue]

  1. 1.Report on business performance of the 1st quarter of 2021
Approved/ Reported8/81/13/34/4
8May 20, 2021

[Submitted Issue]

  1. 1.Deliberation of capital contribution to the D&D Platform REITs
Approved8/81/13/34/4
9May 28, 2021

[Submitted Issue]

  1. 1.Deliberation of large-scale internal transactions for Yongin Baekam logistics center investment
Approved7/71/12/34/4
10June 8, 2021

[Submitted Issue]

  1. 1.Deliberation of large-scale internal transactions for Yongin Baekam logistics center investment
Approved8/81/13/34/4
11June 28, 2021

[Submitted Issue]

  1. 1.Establishment of the ESG Committee and adoption of the Regulations of the ESG Committee
  2. 2.Establishment of the Nomination and Compensation Committee and adoption of the Regulations of the Nomination and Compensation Committee
  3. 3.Amendment to executive officer management regulations
  4. 4.Amendment to the Regulations of the Board of Directors
  5. 5.Establishment of the Outside Director Candidate Recommendation Committee and adoption of the Regulations of the Outside Director Candidate Recommendation Committee
  6. 6.Appointment of committee members
  • Proposed Article 6-1) Appointment of the ESG Committee members
  • Proposed Article 6-2) Appointment of the Nomination and Compensation Committee members
  • Proposed Article 6-3) Appointment of the Outside Director Candidate Recommendation Committee members
Approved8/81/13/34/4
12July 14, 2021

[Submitted Issue]

  1. 1.Deliberation of issuance of FRN (Floating Rate Note)
Approved8/81/13/34/4
13August 18, 2021

[Reported Issue]

  1. 1.Report on business performance in the 1st half of 2021 and business plan for the 2nd half of 2021
  2. 2.Report on business performance of the D&D Investment in the 1st half of 2021 and business plan for the 2nd half of 2021
  3. 3.Report on business performance of the D&D Property Management in the 1st half of 2021 and business plan for the 2nd half of 2021
Reported-1/13/34/4
14September 27, 2021

[Submitted Issue]

  1. 1.Approval of the division plan
  2. 2.Convocation of the 17th Extraordinary General Meeting of Shareholders (draft)
  3. 3.Specification of the reference date (draft)
  4. 4.Predetermination of order of acting Chairperson for the 17th Extraordinary General Meeting of Shareholders
Approved7/71/13/33/4
15October 13, 2021

[Submitted Issue]

  1. 1.Deliberation of large-scale internal transactions for Samsung-dong rental house transfer
  2. 2.Participation in capital increase of the D&D Property Management
Approved8/81/13/34/4
16November 17, 2021

[Submitted Issue]

  1. 1.Signing of MOU for REIT JVs
  2. 2.Deliberation of internal transactions between directors and the Company
  3. 3.Participation in capital increase for D&D Property Management
  4. 4.Appointment of committee members
  • Proposed Article 4-1) Appointment of the ESG Committee members
  • Proposed Article 4-2) Appointment of the Outside Director Candidate Recommendation Committee members

[Reported Issue]

  1. 1.Report on business performance in the 3rd quarter of 2021
Approved/ Reported8/81/13/34/4
17December 1, 2021

[Submitted Issue]

  1. 1.Signing of MOU for blind pool REIT JVs (related to residential business)
  2. 2.Deliberation of large-scale internal transactions for youth house near Onsu station
  • Proposed Article 2-1) Transfer of real estate buyer status and service contractor status, etc.
  • Proposed Article 2-2) Loan of funds
  1. 3.Deliberation of CEO evaluation (draft)

[Reported Issue]

  1. 1.Report on safety and health plans
Approved/ Reported8/81/13/34/4
  • 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

DirectorNameExpertisePositionGenderDate of AppointmentTenureCareer
Inside DirectorDo-hyun KimProfessional management
  • CEO
  • ESG Committee
MaleMar. 2022Mar. 2025(Current) CEO, SK D&D
Non-executive DirectorKi-joong NamProfessional management
  • HR Committee
MaleMar. 2022Mar. 2025(Current) Head of Management Support Office, SK Discovery
Jae-min KimFinance / market analysis
  • HR Committee
  • ESG Committee
MaleNov. 2018Mar. 2024(Current) VP, Hahn & Company
Dong-chun LeeProfessional management- MaleNov. 2018Mar. 2024(Current) VP, Hahn & Company
Outside DirectorJun-cheol Kim (Board Chair)Accounting and finance (certified public accountant)
  • Audit Committee (Chair)
  • ESG Committee
  • Independent Director Recommendation Committee
MaleMar. 2021Mar. 2024(Current) CPA, Dasan Accounting Corporation
Je-hyeoung ParkLaw (lawyer)
  • Independent Director Recommendation Committee (Chair)
  • HR Committee
  • Audit Committee
MaleMar. 2021Mar. 2024(Current) Attorney (Partner), Barun Law
Kil-ho LeeAccounting and finance (certified public accountant)
  • ESG Committee (Chair)
  • Independent Director Recommendation Committee
Male2021-112024-11Auditor General, K car capital
Kyung-min KimEnvironment
  • Audit Committee
  • HR Committee (Chair)
  • Independent Director Recommendation Committee
MaleMar. 2022Mar. 2025Professor, 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

Category20202021
Board’s composition5.004.83
Board’s roles4.904.56
Board’s responsibilities4.884.81
Board’s operation4.814.62
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

CategoryTotal RemunerationAverage Remuneration per Person
Registered director1,8521,852
Outside director*6868
Members of the Audit Committee17458
Auditor1515
  • As of Dec. 31, 2022 / unit : KRW million
  • * Outside director : Members of the Audit Committee Excluded

Protecting Shareholder Rights

We ensure the maximum participation of shareholders at the general meeting of shareholders to present their opinions. The details for the general meeting of shareholders – date, venue and agenda among others – is disclosed on the electronic disclosure system (DART) and on our corporate website. Notice is given two weeks prior to the meeting, and we ensure that the date of such meetings is equally distributed among the company and other group affiliates to encourage the attendance of ordinary shareholders.

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

CategoryUnit201920202021
Voluntary disclosuresNo. of cases030
IR Events *No. of cases013
  • * 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

CategoryUnit20172018201920202021
Common sharesNo. of dividend shares1,000 shares16,15518,99018,99018,99022,190
Dividend per shareKRW600600600600800
Cash dividend yield%1.872.262.061.412.56
Preferred sharesNo. of Preferred shares1,000 shares---5,2002,000
Dividend per shareKRW---1,0221,022
Cash dividend payout ratio%17.8521.7425.3725.3514.85
Total dividendsKRW million9,69311,39411,39416,70819,796

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

PositionDirectorNameAudit-related qualification
ChairOutside directorJun-cheol Kim (Board Chair)CPA
MemberOutside directorJe-hyeoung ParkLawyer
MemberOutside directorKyung-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 YearAuditorAudit Opinion
2021 (Current period)EY KoreaUnqualified
2020EY KoreaUnqualified
2019EY KoreaUnqualified

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

CategoryNo. of Assessment ItemsIssues IdentifiedIssues for Which Action Was TakenNote
Company-wide control4233Completed improvements on identified issues (simple non-compliant issues)
Transaction level control28833
Information Technology General control5633
Total38699100%