Several office workers meet in a conference room to share their opinions.
Composition and Operation of the Board
Governance

Composition of the Board of Directors

Considering the size, business environment and characteristics of SK discovery, the Board has the optimum number of directors to facilitate effective discussion and decision-making as well to provide active oversight of the Board committees. In accordance with Article 382 of the Commercial Act, directors are appointed at the General Meeting of Shareholders and the Board consists of up to 10 directors, as specified in the Articles of Incorporation.

Director

PositionNameGenderRoleRecommending partiesLargest shareholder or has a stake in major shareholdersTerm
Inside DirectorChang-won CheyMaleRepresentative Director, Vice ChairBoard of DirectorsThe largest shareholderMarch 31, 2021 ~ March 30, 2024
Jae-hyun AhnMaleRepresentative Director, PresidentBoard of DirectorsOfficer at an issuing companyMarch 29, 2022 ~ March 28, 2025
Jae-young ChoiMaleChief Financial OfficerBoard of DirectorsOfficer at an issuing companyMarch 29, 2022 ~ March 28, 2025
Outside DirectorJae-yong Song*MaleChair of the Board of Directors, Member of the Audit CommitteeOutside Director Candidate Recommendation Committee-March 31, 2021 ~ March 30, 2024
Hyun-jin KimFemaleMember of the Audit CommitteeOutside Director Candidate Recommendation Committee-March 29, 2022 ~ March 28, 2025
Yong-jun KimMaleMember of the Audit CommitteeOutside Director Candidate Recommendation Committee-March 29, 2022 ~ March 28, 2025
  • As of March 29, 2022
  • * Outside director Jae-yong Song also took on the role of Board Chair after the demise of outside director Young-ho Oh (March 29, 2022).
  • Term ended as of March 6, 2022, deceased.

Outside Directors

NameArea of expertiseBrief resumeAny reason for disqualification
Jae-yong SongStrategic and management risk1997. Professor at the Columbia University Graduate School of Business, USANone
2001. Professor at the Yonsei University Business School
2017. Chair at the Korean Society for Strategic Management
Present. Professor at the Seoul National University Business School
Present. Lifetime Fellow at the Academy of International Business (AIB)
Present. Chair at the International Management Division, Academy of Management, USA
Hyun-jin KimEnergy industry / environmental risk2000. Senior researcher at the Samsung Economic Research InstituteNone
2009. Member of the Presidential Committee on Green Growth
Present. Professor at the Seoul School of Integrated Sciences and Technologies (aSSIST)
Present. Member of the Fiscal Policy Advisory Council at the Ministry of Strategy and Finance
Present. Non-executive director at the Korea Gas Corporation (KOGAS)
Yong-jun KimFinancial / accounting risk2014. Director at the Collection and Legal Affairs Bureau, Seoul Regional Tax Office, National Tax Service (NTS)None
2016. Director at the Faithful Tax Payment Support Bureau, Jungbu Regional Tax Office, NTS
2017. International Tax Administration Officer, NTS
2018. Commissioner of the Jungbu Regional Tax Office, NTS
Present. Advisor at Kim & Chang law firm
  • As of March 29, 2021

We are accentuating the independence of the Board of Directors by appointing outside directors. We maintain the right ratio of outside to inside directors to serve as a check in management decision-making.

Independence and Expertise of the Board of Directors

To identify candidates and appoint directors, SK discovery comprehensively reviews domestic laws and regulations, institutional investor requirements and the Guidelines for Outside Directors Independence. We thoroughly vet the independence of outside director candidates and their specific qualifications for Board performance.

We guarantee a three-year term of office for outside directors, according to the Articles of Incorporation. Our outside directors, who demonstrate expertise and experience in different areas and who have no stake in any of our major shareholders, actively fulfill their responsibilities with independent mindsets. By amending the Corporate Governance Charter, we are working to guarantee the independence of the Board of Directors.

The Board of Directors strives to make rational decisions by considering stakeholder viewpoints and a broad perspective. We prepared the Guidelines for Board of Directors Diversity to support a Board composed of experts from diverse backgrounds, regardless of expertise, experience, age, religion, nationality, race, disability or education.

Outside directors are appointed at a General Meeting of Shareholders after candidates are selected in a transparent procedure by the Outside Director Candidate Recommendation Committee, which was established in accordance with Article 542-8 of the Commercial Act.

The Board of Directors by Area of Expertise

  • As of December 31, 2021

When appointing an outside director, we review qualifications from a legal standpoint, such as independence and concurrent positions, and we submit a qualification verification document to the Korea Exchange. In publicizing the resolution to convene a General Meeting of Shareholders, we transparently disclose the outside director candidate’s independence from the company and legal qualifications via Certification of Qualification of Outside Directors to shareholders and stakeholders.

Operation of the Board of Directors

Operation of the Board of Directors

UnitFY 2019FY 2020FY 2021
Number of meetings of the Board of DirectorsNumber121216
Agenda submitted for the Board of DirectorsCase141221
Agenda approved by the Board of DirectorsCase141221

Attendance for Board of Director Meetings

NamePositionAttendance in 2021
Chang-won ChoiInside Director81.3%
Cheol KimInside Director100%
Chan-joong ParkInside Director100%
Young-ho OhOutside Director100%
Sang-gyu ParkOutside Director93.8%
Won-jun HongOutside Director87.5%
Jae-yong SongOutside Director87.5%
  • As of December 31, 2021

Actions of the Board of Directors

RoundDateAgendaApproved /Pending ApprovalAffirmativeAttendance of inside directorsAttendance of outside directors
1February 16, 2021

[Submitted Issue]

  1. 1.Approval of financial statements and business report in 2020

[Reported Issue]

  1. 1.Report on inspection of internal accounting management system operation in 2020
  2. 2.Report on business performance in 2020
Approved / Reported7/73/34/4
2March 16, 2021

[Submitted Issue]

  1. 1.Acquisition of shares of other corporations
  2. 2.Adoption of resolutions and convocation of Ordinary General Meeting of Shareholders

[Reported Issue]

  1. 1.Report on evaluation of internal accounting management system operation in 2020
  2. 2.Report on major business issues
Approved / Reported7/73/34/4
3March 31, 2021

[Submitted Issue]

  1. 1.Appointment of Representative Director
  2. 2.Enactment of Corporate Governance Charter
  3. 3.Amendment of regulations of the Board of Directors and committees
  4. 4.Approval of internal transaction

[Reported Issue]

  1. 1.Report on major business issues
Approved / Reported6/73/33/4
4April 23, 2021

[Reported Issue]

  1. 1.Report on business performance in 1st quarter and business plan in 2nd quarter of 2021
Reported-3/34/4
5May 17, 2021

[Submitted Issue]

  1. 1.Acquisition of shares of other corporations
Approved6/73/34/4
6May 28, 2021

[Submitted Issue]

  1. 1.Approval of internal transaction
  2. 2.Approval of KPI in 2021
Approved7/73/34/4
7June 10, 2021

[Submitted Issue]

  1. 1.Participation in capital increase of subsidiary
Approved6/73/33/4
8June 25, 2021

[Submitted Issue]

  1. 1.Establishment of a committee within Board of Directors and its regulations
  2. 2.Appointment of members of a committee within Board of Directors
  3. 3.Renewal of director and officer (D&O) liability insurance

[Reported Issue]

  1. 1.Report on major business issues
Approved / Reported7/73/34/4
9July 28, 2021

[Submitted Issue]

  1. 1.Participation in capital increase of subsidiary
  2. 2.Appointment of Chief Compliance Officer

[Reported Issue]

  1. 1.Report on business performance of the 1st half of 2021 and business plan for the 2nd half of 2021
Approved / Reported7/73/34/4
10September 1, 2021

[Submitted Issue]

  1. 1.Acquisition of shares of other corporations
Approved7/73/34/4
11September 24, 2021

[Reported Issue]

  1. 1.Report on major business issues
Reported-3/34/4
12October 12, 2021

[Submitted Issue]

  1. 1.Conclusion of trust contract to acquire treasury shares

[Reported Issue]

  1. 1.Report on plan to increase shareholder value
Approved / Reported7/73/34/4
13November 2, 2021

[Reported Issue]

  1. 1.Report on business performance in 3rd quarter of 2021
Reported-2/32/4
14November 26, 2021

[Reported Issue]

  1. 1.Report on activity of Chief Compliance Officer
  2. 2.Report on results of Nomination and Compensation Committee
  3. 3.Report on reorganization and changes in position of executive officers
Reported-3/33/4
15December 21, 2021

[Submitted Issue]

  1. 1.Approval of company bond issuance limit in 2022
  2. 2.Approval of internal transaction

[Reported Issue]

  1. 1.Report on acquisition of shares of other corporations
Approved / Reported6/72/34/4
16December 21, 2021

[Submitted Issue]

  1. 1.Acquisition of shares of other corporations
Approved6/72/34/4
  • As of December 31, 2021

In support of Board-centered management, we guarantee equal opportunities for every director to express his/her opinion. We send out agendas 7 days before each Board meeting so outside directors have time to fully review materials. Outside directors, if desired, may receive support from officers, employees or external experts and request information they want to fulfill their duties.

Operation of Committees supervised by Board of Directors

We established and operate Board committees to enhance the expertise and efficiency of the Board of Directors, in accordance with the Articles of Incorporation, the Corporate Governance Charter and the Regulations of the Board of Directors. We also adopted regulations for the committees, specifying each one’s purpose, authority and responsibilities, guidelines and procedures, and key duties.

Major Functions of Each Committee

CommitteeMajor functionsRelevant rules and regulations
Audit Committee Three outside directors, including a financial expert
  • Audit of performance of the director’s duties
  • Request for business report from the director
  • Investigation of the company’s business and property
  • Review and approval of internal transactions and transactions with specially related persons
  • Request for sales report of subsidiaries for performing duties
  • Request for appointment or dismissal of independent auditor
  • Receipt and evaluation of reports on internal accounting management system, operation
Articles of Incorporation (Article 25 / 34) Corporate Governance Charter (Part 1, Chapter 6 / Part 3, Chapter 1) Regulations of the Audit Committee (Article 3 / 9)
ESG Committee One insider director Two outside directors
  • Advice and review on management strategies and directions for the company’s sustainable growth
  • Review of ESG-related action plans
  • Management, supervision and evaluation of ESG-related activities
  • Review of financial and non-financial risk and opportunity evaluation results and measures of action
  • Annual business plan of the company and its revisions
  • Mid- to long-term plan and its revisions
  • Critical strategic decision-making
  • Management of major environmental and social non-financial issues and countermeasures
Regulations of the ESG Committee (Article 3 / 9)
Nomination and Compensation Committee One insider director Two outside directors
  • Evaluation of the Representative Director and retention of his/her position based on evaluation results
  • Proposal of dismissal and/or appointment of the Representative Director
  • Recommendations and management of candidates for the Representative Director
  • Review of appropriate remuneration for inside directors
  • Review of results of evaluation and remuneration of key officers
Regulations of the Nomination and Compensation Committee (Article 3 / 9 / 10)
Outside Director Candidate Recommendation Committee Two outside directors
  • Exercising the right to recommend outside director candidates at the General Meeting of Shareholders
  • Review of other matters necessary to recommend outside director candidates
Articles of Incorporation (Article 32-2) Corporate Governance Charter (Part 1, Chapter 6, Article 31) Regulations of the Board of Directors (Article 11) Regulations of the Outside Director Candidate Recommendation Committee (Article 3 / 9)
  • As of May 31, 2022

Audit Committee

Consisting exclusively of outside directors, the Audit Committee at SK discovery is chaired by a financial accounting expert. Outside directors who become Audit Committee members are appointed upon the recommendation of the Outside Director Candidate Recommendation Committee. We disclose the rationale for appointments of all members in the business report.

By specifying the composition, duties and authority of the Audit Committee in the Articles of Incorporation, Corporate Governance Charter and Regulations of the Audit Committee, we ensure the independence and authority of Audit Committee members. We provide internal accounting education twice a year to enhance their expertise. We also vet independent auditors appointed by the Audit Committee.

We have developed specific remuneration with no additional compensation for Audit Committee members so their audits remain independent of management and controlling shareholders. That amount is determined by detailed consideration of the time and effort needed to perform their duties, their general responsibilities as a director and the extent of their legal liabilities as an active Audit Committee member.

The Audit Committee meets at least once every quarter, and, when necessary, includes the participation of independent auditors, a head of internal audit department, an executive financial officer and senior management. We also regularly communicate with independent auditors at least once a quarter. Minutes are prepared after every quarterly meeting, and Audit Committee members affix their seals or signatures to confirm the results.

Major Activities

RoundDateAgendaAffirmativeAttendance
1February 16, 2021

[Reported Issue]

  1. 1.Report on inspection of internal accounting management system operation in 2020
  2. 2.Report on internal audit results in 2020
-4/4
2March 9, 2021

[Reported Issue]

  1. 1.Report on audit results of internal accounting management system in 2020
  2. 2.Report on evaluation of internal accounting management system operation in 2020
-4/4
3March 16, 2021

[Submitted Issue]

  1. 1.Confirmation of audit report
  2. 2.Confirmation of agenda for the 52nd Ordinary General Meeting of the Shareholders and opinions on document investigations
  3. 3.Confirmation of report on the evaluation of internal accounting management system operation in 2020

[Reported Issue]

  1. 1.Report on audit results for fiscal year 2020
4/44/4
4April 23, 2021

[Reported Issue]

  1. 1.Report on audit results in 2020 and audit plan in 2021
-4/4
5July 28, 2021

[Reported Issue]

  1. 1.Report on audit issues by independent auditors
  2. 2.Report on inspection plan of internal accounting management system operation in 2021
-4/4
6October 26, 2021

[Reported Issue]

  1. 1.Report on progress of auditor designation process for fiscal year 2022
-4/4
7November 2, 2021

[Reported Issue]

  1. 1.Report on audit issues by independent auditors
-2/4
8November 26, 2021

[Reported Issue]

  1. 1.Report on progress of the auditor designation process for fiscal year 2022
-3/4
9December 21, 2021

[Reported Issue]

  1. 1.Report on audit issues by independent auditors
-4/4
  • As of December 31, 2021

ESG Committee

At SK discovery, we know that the Board must pursue the happiness of both stakeholders and employees to sustain and develop the company. To oversee that goal, we established the ESG Committee, which is composed of inside and outside directors to ensure an open-minded perspective.

We amended the Regulations of the ESG Committee to achieve more effective operation and flexibility as we learn more about the many economic, environmental and social issues of ESG management. We also review management strategies and directions for sustainable growth while responding to any Board of Director inquiries. Besides setting ESG initiative objectives, we review detailed action plans, activity details and information disclosure needs in order to make appropriate decisions about ESG risks and opportunities.

ESG Risk Management

Recognizing that tasks related to sustainability may pose important risk management issues, the ESG Committee reviews both financial and non-financial risks when judging management resources and investments of staff-in-charge and senior management.

We prepared non-financial risk assessment guidelines in 2022 to address environmental issues, such as climate change, water/soil/ocean/air pollution, ecosystem destruction and potential health issues that may surface during business. We also work to maintain positive social impact and prevent violations of human rights, labor issues and displacement or destruction of livelihoods and cultures of indigenous peoples. We are improving the SK discovery and subsidiary investment processes so our guidelines are integrated into extant investment reviews.

Environmental and Social Risk Assessment Process

Major Activities

RoundDateAgendaAffirmativeAttendance
1July 15, 2021

[Submitted Issue]

  1. 1.Appointment of Chair of the ESG Committee
3/33/3
2August 23, 2021

[Reported Issue]

  1. 1.Report on subsidiaries ESG management progress
  2. 2.Report on the company’s SHE upgrade progress
-3/3
3December 7, 2021[Reviewed Issue]
  1. 1.Acquisition of shares of other corporations
-3/3
  • As of December 31, 2021

Nomination and Compensation Committee

The Nomination and Compensation Committee reviews the personnel matters of officers, including the Chief Executive Officer. While managing and evaluating candidates for CEO, the Committee receives reports on relevant issues from the Secretariat, the Corporate Culture Office.

Review of appropriate remuneration is also a e Committee responsibility. The Nomination and Compensation Office is in charge of setting senior management’s KPI (Key Performance Indicator) plans and year-end evaluation data. The Committee reviews the evaluation outcome and reports that to the Board of Directors. The Board has final approval of issues reviewed by the Nomination and Compensation Committee. Relying on that review, we disclose general remuneration guidelines for directors as well as for individual directors twice a year in semiannual business reports.

In evaluating management performance and compensation, we consider the implementation and performance of ESG activities. Our comprehensive focus includes three key pillars: financial performance, strategic missions and ESG progress. When it comes to ESG, we mainly evaluate development and results of only major initiatives because ESG issues are constantly changing. Incorporating ESG factors into our senior management evaluation is accelerating ESG integration into companywide business activities and leadership.

We already reflect ESG factors in the CEO KPI, and plan to expand the reflection of ESG factors in senior management’s KPIs in the future.

Major Activities

RoundDateAgendaAffirmativeAttendance
1July 15, 2021

[Submitted Issue]

  1. 1.Appointment of the chair of the Nomination and Compensation Committee
3/33/3
2August 26, 2021

[Reported Issue]

  1. 1.Report on results of evaluation of KPIs and key executive officers in the 1st half of the year
-3/3
3November 17, 2021

[Reported Issue]

  1. 1.Report on results of evaluation of key executive officers

[Reviewed Issue]

  1. 1.Evaluation of the Representative Director
-3/3
4November 24, 2021[Reviewed Issue]
  1. 1.Retention of the Representative Director
-3/3
  • As of December 31, 2021

Outside Director Candidate Recommendation Committee

As soon as outside directors are appointed, the Outside Director Candidate Recommendation Committee ensures their independence by blocking influence from controlling shareholders or senior management. The Committee’s mission is to minimize management interference and verify competence in an objective manner.

The Committee verifies candidate expertise and examines whether he/she should be disqualified based on prevailing regulations, such as the Commercial Act and the Enforcement Decree of the Commercial Act. The Committee also considers the candidate’s area of expertise relative to other expertise on the Board, as well as issues of diversity and outside director independence before selecting candidates and ultimately nominating them at a General Meeting of Shareholders. We disclose the appointment background of directors and recommendations in the business report.

Major Activities

RoundDateAgendaAffirmativeAttendance
1March 16, 2021

[Submitted Issue]

  1. 1.Recommendation of outside director candidates to become members of the Audit Committee
3/33/3
  • As of December 31, 2021

Operation of Support Office for the Board of Directors

A dedicated support office helps us to schedule general Board of Director meetings and provide timely agenda materials that allow outside directors to review and request additional information. We also conduct various educational workshops for the Board and encourage directors to participate in joint director workshops of SK discovery subsidiaries and SK Group.

Implementation of Education (Workshops) for Outside Directors

DateProviderAttended outside directorsReasons for absenceKey content
May 13, 2021SK discoveryYoung-ho Oh Sang-gyu Park Won-jun Hong Jae-yong Song-Enhancing ESG and Board-centered management / Key management issues
June 18, 2021SK GroupYoung-ho Oh Jae-yong SongOnly a few directors were present as company representativesEducation on governance improvement
July 23, 2021SK GroupJae-yong SongOnly a few directors were present as company representativesEducation on governance improvement
October 7, 2021SK GroupYoung-ho Oh Sang-gyu ParkOnly a few directors were present as company representativesEducation on governance improvement
  • As of December 31, 2021

We preserve the meeting minutes of the Board of Directors and its special committees. Using relevant indicators, we consistently evaluate the Board of Director operations and improve its effectiveness.

Evaluation Process of the Board of Directors

  • Evaluation purpose: Improving governance by promoting activities of the Board of Directors and operational efficiency
  • Evaluation methodology: Conducting an online evaluation of the Board of Directors and committees by outside directors once per year(the first quarter of each year)
  • Evaluation content: Assessing appropriateness, fidelity, sufficiency and effectiveness in terms of composition, roles, responsibilities and operation of the Board of Directors and committees, as measured by five-point response scales and open-ended questions
  • Evaluation outcome: Disclosing the results of the evaluation on the company website and in its business report and disclosing specific improvements at a later date.

Evaluation Outcomes of the Board of Directors in 2021 (Self-Evaluation)

Overall rating (1 - 5)Composition of the Board of DirectorsRoles of the Board of DirectorsResponsibilities of the Board of DirectorsOperation of the Board of DirectorsComposition of the committeesRoles operatons of the committees
4.64.84.34.74.74.74.4
  • * Outcomes of online evaluation by outside directors in February 2022

Remuneration of the Board of Directors

Using remuneration guidelines approved at the General Meeting of Shareholders, SK discovery determined Board base salaries by considering each director’s position (role), expertise and contribution to the company. Our performance-related pay is calculated by such rigorous quantitative assessments as company revenue, operating profit and pre-tax profit, as well as qualitative assessments such as achieving strategic goals and leadership. For outside directors who serve on the Audit Committee, we determined base salary by considering not only their duties and expertise but also the company’s business environment. The ratio of the highest-paid recipient to the average pay of our officers and employees in 2021 was 11.95 times.

Director Remuneration

FY 2020FY 2021
Number of personsTotal remunerationAverage remuneration per personNumber of personsTotal remunerationAverage remuneration per person
Board Director32,42981033,2131,071
Outside Director as a member of the Audit Committee430175434286
Auditor------
  • Unit : KRW million

Stock Ownership of Executive Officers

NamePositionType of sharesNumber of shares
Chang-won ChoiExecutive Officer (Representative Director and Vice Chair)Common Share7,650,128
Preferred Share5,782
Cheol KimExecutive Officer (Representative Director and President)Common Share5,000
Chan-joong ParkExecutive Officer (Representative Director and President)Common Share723
  • As of December 31, 2021

Ratio of Remuneration of the Representative Director to Officers and Employees

UnitAmount
Remuneration of the Representative Director (A)*KRW1,700,000,000
Average remuneration of officers and employees (B)KRW142,278,483
Median remuneration of officers and employees (C)KRW107,692,900
Ratio of remuneration of the Representative Director to average remuneration of officers and employees (A/B)Times11.95
Ratio of remuneration of the Representative Director to median remuneration of officers and employees (A/C)Times15.79
  • As of December 31, 2021
  • * (A) is the income on the reported salary statement of the recipient with the highest remuneration.