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Sustainability

SK Square aims to become a sustainable investment company
based on ESG management.

Corporate Governance

SK Square has established a governance structure that brings transparency into its management activities based on checks and balances centered on the BOD and aims to continuously enhance corporate value through sound and stable management activities. In addition, we have announced the “execution of responsible management centered on the BOD.”

BOD-centered Management

The BOD is composed of executive and independent directors with competence through expertise and experience in various fields based on the principles of independence, expertise, and diversity. Through its board-centered management, SK Square will pursue harmonious and balanced happiness and social values between the company and society.

Committees
within the BOD

SK Square has established and operates five committees under the BOD to enhance its professionalism and efficiency. These include the Independent Director Nominating Committee, the Audit Committee, the ESG Committee, the Governance Committee, and the Compensation Committee. Each committee within the BOD stipulates its organization, operation, and authority in the operating regulations for each committee for efficient work performance.

The Committees

Independent Director Nominating Committee
It deliberates and decides on matters necessary for the nomination of independent director candidates.
Candidates for independent directors are composed of competent persons who meet the qualifications required by the Commercial Act, other related laws, and the Articles of Incorporation, and possess expertise and responsibilities in various fields without discrimination.
Audit Committee
It reviews the company's financial, tax, and audit-related risks.
It reviews the financial statements and accompanying statements for auditing, and audit procedures and results of independent accounting firms.
It also conducts audits on the effectiveness of internal controls and evaluation of internal control structures.
ESG committee
It reviews the direction and performance of major areas related to the environment, social value, and corporate governance.
It also deliberates on how the company can achieve long-term sustainable growth and development.
Governance committee
It deliberates on corporate governance and governance-related regulations that have a significant impact on shareholder value.
It also discusses company-wide key performance indicators (KPIs) and the company's mid- to long-term future strategies.
Compensation committee
It manages and recommends candidates for the representative director.
It proposes reappointment and appointment of the representative director.
It also reviews the appropriateness of remuneration for the representative director and executive directors.

Bolstering Board Independence, Diversity, and Professionalism

SK Square appoints independent directors who meet the requirements for independence to make decisions independently of the management and controlling shareholders when electing independent directors. To bolster its independence, the BOD ensures that an independent director can be elected as its chairperson. Also, the BOD is composed of investment, finance, economics, legal affairs, and accounting experts to secure balanced expertise in various fields.

Board Independence, Diversity, and Professionalism Policy

  • Separation of the BOD chair and the CEO and having an independent director serve as the BOD chair bolsters the independence of the governance structure. In addition, independent directors account for more than half of the entire member of BOD.
  • The standards for determining the independence of independent directors and conflicts of interest are specified in the Articles of Incorporation in accordance with the Commercial Act, the Fair Transactions in Franchise Business Act, and other laws in South Korea.
  • Diversity is ensured by appointing directors without discrimination based on gender, race, nationality, region, or religion.
  • In addition, experts in each field, such as management, economy, accounting, law, or investment, were appointed to strengthen the BOD’s expertise.

Goals and Performance

Percentage of independent directors in BOD
Unit %
2021 57.1
2022 57.1
Number of female directors
Unit Director
2021 1
2022 1
Percentage of female directors
Unit %
2021 14.3
2022 14.3
2023 2025
  • Upgrading the ESG issue management system (increasing the ESG discussion within the BOD)
  • Increasing communication with various stakeholders (bolstering expertise)
  • Continuously boosting BOD independence, diversity, and expertise
Category Unit 2021 2022
Percentage of independent directors in BOD % 57.1 57.1
Number of female directors Director 1 1
Percentage of female directors % 14.3 14.3
2023 2025
  • Upgrading the ESG issue management system (increasing the ESG discussion within the BOD)
  • Increasing communication with various stakeholders (bolstering expertise)
  • Continuously boosting BOD independence, diversity, and expertise

Appointment of Directors and Independent Directors

Directors are appointed at the General Shareholders' Meeting in accordance with Article 382 of the Commercial Act and Article 35 of the Articles of Incorporation, and independent directors are appointed from among candidates recommended by the Independent Director Nominating Committee in accordance with Article 582-8 of the Commercial Act and Article 36 (2) of the Articles of Incorporation. In particular, when it comes to recommending candidates for independent directors, the Compensation Committee, which has a majority of independent directors, recommends candidates with both expertise and independence through a fair and transparent process. Candidates for independent directors recommended through such rigorous screening and candidates for executive directors recommended after discussion with the BOD are finally selected at the General Shareholders' Meeting.

Independent Director Appointment Process

  1. STEP 1. Eligibility review focusing on independence Review of qualifications for independent directors
  2. STEP 2. Forming a pool of independent director candidates Consideration of professionalism and diversity
  3. STEP 3. Candidate recommendation Independent director candidate recommendation by the Independent Director Nominating Committee
  4. STEP 4. Final appointment Final appointment of independent directors through General Shareholders' Meeting

BOD Activities

SK Square basically holds regular board meetings. We operate a pre-report meeting for independent directors and actively support the activities of the BOD, such as providing information on management and resources necessary for performing tasks through the Secretariat of the BOD, a dedicated support organization. In 2022, the attendance rate of board meetings of all directors is 100%, and the attendance rate of independent directors is also 100%.

Committee Activities

SK Square has committees under the BOD including the Independent Director Nominating Committee, the Audit Committee, the ESG Committee, the Governance Committee, and the Compensation Committee. The organization, operation, and authority of all committees are stipulated in written form, and the details of each committee's holdings, agenda deliberation, and resolution are reported to the BOD. All committees are chaired by independent directors, and the ratio of independent directors is more than half to ensure independence and transparency in decision-making.

Independent Director Nominating Committee

Role

  • Recommendation of candidates for independent director and deliberation and resolution on necessary matters
  • Composition 3 independent directors and 1 executive director
  • Members Ho In Kang (independent), Seung Gu Park (independent), Jung Ho Park (executive), Seong Woo Lee (independent)

Audit Committee

Role

  • Review the company's financial, tax, and audit-related risks
  • Audit on the effectiveness of internal control and evaluation of internal control structure
  • Composition 4 independent directors
  • Members Eun Sun Ki (independent), Ho In Kang (independent), Seung Gu Park (independent), Seong Woo Lee (independent)

ESG Committee

Role

  • Review of direction and performance related to environmental, social value, and corporate governance
  • Review of risks from the ESG perspective on the BOD agenda
  • Composition 3 independent directors
  • Members Ho In Kang (independent), Eun Sun Ki (independent), Seong Woo Lee (independent)

Governance Committee

Role

  • Deliberation of corporate governance and governance-related regulations
  • Discussion of company-wide key performance indicators and company's mid- to long-term future strategies
  • Composition 4 independent directors and 1 executive director
  • Members Seung Gu Park (independent), Ho In Kang (independent), Eun Sun Ki (independent), Poong Young Yoon (executive), Seong Woo Lee (independent)

Compensation Committee

Role

  • Management and recommendation of candidates for CEO
  • Re-appointment and first-time appointment of the CEO, deliberation on the adequacy of remuneration for the CEO and executive directors
  • Composition 3 independent directors and 1 non-executive director
  • Members Seong Woo Lee (independent), Eun Sun Ki (independent), Sung Ha Park (non-executive), Seung Gu Park (independent)

ESG Activities

In order to bolster the BOD's execution in ESG management, the ESG Committee under the BOD plans to further expand discussions on SK Square's ESG risk check and performance boost and continuously monitor them.

Key activities
Review the ESG strategy direction and manage and supervise (monitor) the implementation of major tasks
Final inspection of performance against annual goals and finding improvement points
Publication of reports to improve accessibility to ESG information
Invitation of key stakeholders related to ESG and operation of discussion sessions
Communication through participation in external ESG forums and events
Ho in Kang (ESG Committee Chairperson) Eun Sun Ki (ESG Committee Member) Seong Woo Lee (ESG Committee Member)
•Co-president, Citizens' Coalition for Safety (since 2021). Expert on social and safety issues •Professor of Division of Business Administration and Accounting, Kangwon National University (since 2015), Expert on management, accounting, and finance •Professor of Dong-A University Law School (since 2007), Expert on corporate governance structure

ESG Committee Activities

ESG-related BOD agenda implementation rate
Unit %
2021 -
2022 (Q2) 100
2023 Target 100
Number of instances in which opinions were collected from and communication was made with stakeholders on ESG
Unit Instance
2021 -
2022 (Q2) 2
2023 Target 3
Major discussion in 2022
2021 Carbon Neutral Strategy for 2040
2022 (Q2)
2023 Target
Category Unit 2021 2022 (Q2) 2023 Target
ESG-related BOD agenda implementation rate % - 100 100
Number of instances in which opinions were collected from and communication was made with stakeholders on ESG Instance - 2 3
Major discussion in 2022 Carbon Neutral Strategy for 2040

ESG-based Executive Performance Evaluation and Compensation Policy

SK Square reflects ESG factors in its evaluation of the management's performance. We have bolstered executive power for ESG management by comprehensively considering financial and social performance. The KPI items reflected in the performance evaluation include factors covering the entire ESG areas, such as greenhouse gas reduction performance, employee safety and health, and anti-corruption practices.

ESG-based Executive Performance Evaluation and Compensation Goals

  1. 2023

    Expand the scope of performance evaluation reflecting ESG factors

  2. 2025

    Bolster the performance evaluation and compensation policy that reflects ESG factors

Performance in the ESG-based executive performance evaluation and compensation execution

ESG items reflected in management KPIs (2022)

Expertise Support for Independent Directors

In order to enhance independent directors’ understanding of the company, SK Square provides education on the company's strategic directions and major management status for independent directors in the form of orientation. To enhance the independent directors' expertise in decision-making, we provide investment-related insights, holds independent director reporting sessions, and supports training and seminar attendance.

Status of Training for Independent Directors

Number of training sessions to bolster the expertise of independent directors
Unit Session
2021 2
2022 (Q2) 5
2023 Target -
Number of training hours to bolster the expertise of independent directors
Unit Hour
2021 2.5
2022 (Q2) 3
2023 Target -
Category Unit 2021 2022 (Q2) 2023 Target
Number of training sessions to bolster the expertise of independent directors Session 2 5 -
Number of training hours to bolster the expertise of independent directors Hour 2.5 3 -

Information and Resources Support for Independent Directors

SK Square provides agenda materials to independent directors in advance before the BOD and committee meetings so that they can fully review the agenda and freely express their opinions on the agenda. To ensure that independent directors can perform their duties smoothly and in a professional manner in the BOD and its committees, we operate the BOD Secretariat, a dedicated support organization.

Status of the BOD Pre-reporting Sessions

Number of the BOD pre-reporting sessions held
Unit Session
2021 1
2022 (Q2) 5
2023 Target -
Attendance rate at the BOD pre-reporting sessions
Unit %
2021 100
2022 (Q2) 100
2023 Target -
Category Unit 2021 2022 (Q2) 2023 Target
Number of the BOD pre-reporting sessions held Session 1 5 -
Attendance rate at the BOD pre-reporting sessions % 100 100 -

Status of the Independent Director Support Organization

Organization Name BOD
Secretariat
Staff Size 4 employees
Status (*Years in Employment) -
Key Activities General management and working-level support of the BOD and its committees
Organization Name Staff Size Status (*Years in Employment) Key Activities
BOD Secretariat 4 employees - General management and working-level support of the BOD and its committees