Several office workers meet in a conference room to share their opinions.
Protection of Shareholder Rights
Governance

SK discovery is committed to protecting the rights of shareholders and investors. We have improved the procedures and information disclosure practices of General Meetings of Shareholders to make sure stakeholders have accurate information in a timely manner. We have also improved access to information by diversifying our communications channels and establishing an internal delivery system to disclose information.

Convocation of a General Meeting of Shareholders

In accordance with Article 363 and 542-4 of the Commercial Act and Article 15 of our Articles of Incorporation, we disclose all matters concerning the General Meeting of Shareholders, including the date, place and agenda, on our Data Analysis, Retrieval and Transfer System (DART) and on the company website (www.skdiscovery.com).

To ensure as many shareholders as possible take part in management decisions, we selected an earlier notification date for meetings. By using the DART, we now notify shareholders about 21 days before the General Meeting of Shareholders and continue to set the notice as early as possible. SK discovery and our key subsidiaries hold the General Meeting of Shareholders on varying dates to facilitate the participation of ordinary shareholders.

Date of General Meeting of Shareholders

YearNotification of General Meeting of ShareholdersDate of General Meeting of Shareholders
Year 2020March 12March 27
Year 2021March 16March 31
Year 2022March 4March 29

Each Company’s Date of General Meeting of Shareholders

CompanyDate of General Meeting of Shareholders in 2022
SK discoveryMarch 29
SK chemicalsMarch 28
SK gasMarch 24
SK D&DMarch 23

Operation of a General Meeting of Shareholders

Shareholders attending the General Meeting of Shareholders may freely express their opinions, make inquiries and ask for explanations before the resolution of the agenda. We always respond in good faith to requests from shareholders who attend the General Meeting of Shareholders (providing requests are not intended to interfere with proceedings, have no validity or repeat other queries). Our officers and managers in charge of presenting an issue respond to questions from shareholders.

To ease the voting process and secure a meeting quorum, we introduced electronic voting at the 51st Ordinary General Meeting of Shareholders. We also implemented a “proxy solicitation” for all shareholders in order to facilitate the exercise of voting rights. In addition, shareholders can exercise voting rights indirectly by submitting written documents that verify proxy representation.

Types of Shareholder Resolution at the General Meeting of Shareholders

Introduction
Write-in votingNo
Electronic votingYes
Cumulative votingNo
Ensuring the exercise of voting rights by submitting a letter of proxyYes
Electronic proxy votingNo
Proxy solicitationYes

After the General Meeting of Shareholders, we transparently disclose the agenda and the number of shares and ratio of affirmative/negative votes on the Corporate Governance Report.

Protecting Shareholder Rights

We ensure that ordinary shareholders can exercise their rights at the General Meeting of Shareholders. All shareholders have the right to one vote per share. Any matter that materially affects the company and the rights of shareholders, such as mergers or business transfers, is decided at the General Meeting of Shareholders in a way that ensures maximum protection of shareholder rights. Our Corporate Governance Charter spells out specific details about the rights of ordinary shareholders and the protection of shareholder rights.

SK discovery Share Information

Detail
Total number of issued shares20,396,310 shares
Total number of shares with voting rights18,430,364 shares
Voting rights per shareOne voting right per share guaranteed
Shares with differential voting rightsNone
Shares with restricted voting rightsNone
Regulations on restrictions of voting rightsYes (Article 18 of the Articles of Incorporation)
  • As of December 31, 2021

Our shareholder rights for proposing meeting agenda items also protect shareholder rights. Shareholders who hold a certain percentage or more of shares may propose a purpose for a General Meeting of Shareholders up to 6 weeks prior to the meeting. In accordance with the Commercial Act, these shareholders can exercise proposal rights either in writing or electronically. In such cases, we review the proposal in accordance with internal procedures and present it at the meeting. As shareholder interest expands into environmental and socially responsible management, we strive to ensure that all topics and forms of the agenda are addressed.

To make sure shareholders view accurate information in our financial reporting material, we prepare and publish a report on the operation of the Internal Accounting Management System that’s reviewed and certified by the Representative Director, the Chief Finance Officer and the Audit Committee.

Separate Submission of Important Agendas

In proposing important agendas, such as the appointment of executive officers or amendments to the Articles of Incorporation, we separate agenda items for each executive officer or article so shareholder intentions are accurately reflected on a case-by-case basis.

By providing advance key information about the agenda of the General Meeting of Shareholders, we ensure shareholders have sufficient time to make the necessary judgments in exercising their voting rights. To help facilitate those judgments, we provide specific information about executive officer candidates, including any relationship with the largest shareholder; any relationship with an affiliate; detailed work experience; the recommendation rationale of the Board of Directors; any fact of arrears; any reason to restrict employment under the law; and/or any other reason for disqualification. When selecting directors who will become members of the Audit Committee, we appoint them independently from other directors while including the financial accounting expertise of the separately appointed auditors.

Dividend Policy

By providing a dividend, or distribution of profits, of payment or shares, we enhanced shareholder value as we expanded the dividend policy and stipulated relevant matters in the Articles of Incorporation. Our dividend policy is explained in our regular reports, such as business reports, quarterly reports and IR materials posted on our website. Dividend payment matters are disclosed through the DART after the resolution of the Board of Directors. Dividends are paid to shareholders within one month of final decisions at the General Meeting of Shareholders.

Dividend Information

Type of sharesFY 2019FY 2020FY 2021
Dividend per share (KRW)Common share7001,0001,500
Preferred share7501,0501,550
Number of dividend shares (in thousands)Common share19,02619,02618,430*
Preferred share1,3571,3571,357
Dividend yield (%)Common share2.8%1.5%3.2%
Preferred share4.5%1.9%4.2%
  • * As of the end of 2021, the company’s purchase of 595,357 treasury shares reduced the number of dividend shares.

Disclosure and Improved Accessibility

To help stakeholders better understand our management, we disclose a range of information on our website, including financial information; disclosure information on the DART; notices of a General Meeting of Shareholders; appointments of an independent auditor; and quarterly IR materials. Along with our regular disclosures, we strive to equally provide all shareholders with corporate information that may affect the value of the company.

We make sure all disclosure information is released accurately, completely, fairly and promptly in accordance with our relevant rules and disclosure information management regulations, including disclosure management and operations; assessment and management of disclosure risks; monitoring; and prohibition of unfair trade of officers and employees. To strengthen the expertise and efficiency of disclosures, we designated a specific disclosure officer who completed a required training course to hone his capabilities. In addition, we are expanding shareholder access to corporate information by establishing an ESG website for greater detail about our ESG management.

Corporate Governance Comparison with Best Practices

CategoryCode of Best Practices of Corporate GovernanceAcceptanceDetails
General MattersIntroducing the Corporate Governance CharterYesAdopted on March 31, 2021 / disclosed via ESG homepage
Introducing the Code of Ethics for officers and employeesYesAdopted on October 1, 2008 / disclosed via ESG homepage
Board of DirectorsSeparating CEO and Board Chair positionsYesAppointed Board Chair from outside directors
Composition of the Board and disclosure of the ratio of outside directorsYesAs of December 31, 2021, the ratio of outside directors is 57% (3 inside directors, 4 outside directors)
Establishing committees within the BoardYesEstablished and operating Audit Committee, ESG Committee, Nomination and Compensation Committee, Outside Director Candidate Recommendation Committee
Introducing regulations on the roles and operating procedures of the Board and special committeesYesIntroduced individual regulations for the Board of Directors and each committee / disclosed via ESG homepage
Holding regular Board meetingsYesDisclosed via business report and ESG homepage
Providing information about the Board meetings to directorsYesGave notice of agenda 7 days prior to the Board meetings
Disclosure of the history of board activities, attendance rates and affirmative/negative votes on key agendaYesDisclosed via business report and ESG homepage
Composition of committees within the BoardYesDisclosed via business report and ESG homepage
Establishment of CEO succession system and internal regulations-No such activity
Preparation of the minutes of the Board and committee meetingsYesPrepared and preserved the minutes of the Board and committee meetings
Ensuring and then disclosing outside directors’ independenceYesEnsured independence by regulations and guidelines / disclosed via ESG homepage
Ensuring Board expertise and diversityYesEnsured independence by regulations and guidelines / disclosed via ESG homepage
Evaluation of the Board and committees within the BoardYesDisclosed via business report and ESG homepage
Obtaining liability (D&O) insurance for potential director lawsuits or damages at the expense of the companyYesProvided liability insurance for executive officers
Audit DepartmentFormation of the Audit Committee (all outside directors)YesDisclosed via business report and ESG homepage
Enhancing the expertise of the Audit CommitteeYesDisclosed via business report and ESG homepage
Including accounting or financial experts at the internal audit departmentYesIncluded accounting/finance experts in the Audit Committee members
Holding the Audit Committee meeting at least once a quarterYesDisclosed via business report and ESG homepage
Providing education for the internal audit department at least once a yearYesProvided two annual education sessions on internal accounting
Support for tapping external adviceYesDisclosed via ESG homepage
Maintaining the independence of independent auditorsYesDisclosed via ESG homepage
General Meeting of ShareholdersAdopting a cumulative voting system-No such activity
Notification of a convocation of the meeting 4 weeks prior to the General Meeting of Shareholders-Notified a convocation of the meeting 3 weeks prior to the General Meeting of Shareholders
Holding the General Meeting of Shareholders on varying datesYesHeld the meeting on varying dates / View more detail at ESG homepage
DisclosureAccuracy certification for business reports, etc.YesCertified by CEO and responsible executive officer
Disclosure of audit reports and important ad hoc disclosures in Korean and English-Disclosed the ad hoc disclosures in English since 2022
Explaining variations from standard best practicesYesDisclosed via ESG homepage

Organization Size

Company sales and total capital by liabilities and assets, as follows:

Summary of Consolidated Financial Statements (Unit: KRW million)

FY 2019FY 2020FY 2021
Current assets2,014,9332,456,5972,801,641
- Liquid assets1,587,0322,068,0372,267,957
- Inventory427,901388,560533,684
Non-current assets2,985,1743,165,0374,080,232
- Investments in affiliates and joint ventures1,123,5961,313,9582,041,580
- Tangible assets1,026,5781,038,7791,163,759
- Intangible assets113,871115,282149,942
- Other non-current assets721,129697,018724,951
Total assets5,000,1075,621,6346,881,873
Current liabilities1,684,7411,454,4701,977,475
Non-current liabilities992,1511,550,8031,835,090
Total liabilities2,676,8923,005,2733,812,565
Equity attributable to owners of the parent1,682,6641,946,9872,413,291
- Issued capital111,677111,677111,677
- Capital surplus602,116619,660690,582
- Capital adjustment(1,109,540)(1,108,205)(1,188,448)
- Accumulated other comprehensive income(291)(2,754)287,061
- Retained earnings2,078,7022,326,6092,512,419
Non-controlling interest640,551669,374656,017
Total equity2,323,2152,616,3613,069,308
Total liabilities and equity5,000,1075,621,6346,881,873
Number of consolidated subsidiaries7810

Summary of Consolidated Income Statements (Unit: KRW million)

FY 2019FY 2020FY 2021
Sales5,021,0684,519,4646,614,328
Operating income173,948172,96774,366
Income from continuing operations before taxes167,385516,153364,742
Net income from continuing operations195,505355,450272,295
Net income from discontinued operations54,691--
Net income250,197355,450272,295
Net income attributable to:
Owners of the parent180,383267,001212,899
Non-controlling interest69,81488,44959,396
Earnings per share attributable to owners of the parent
Earnings per common share (unit: KRW)8,84613,09610,478
Earnings per preferred share (unit: KRW)8,89613,14610,569
Earnings per common share from continuing operations (unit: KRW)6,16413,09610,478
Earnings per preferred share from continuing operations (unit: KRW)6,19913,14610,569
Diluted earnings per common share (unit: KRW)8,84613,09610,475
Diluted earnings per preferred share (unit: KRW)8,89613,14610,567