SK Group Outside Directors' Female and Professional Executive Ratios Jump 3.5 Times in 2 Years

Strengthening Board Diversity, Expertise, and Independence
Chairman Chey Tae-won Emphasizes 'Governance Story' Achievements
"Proving Governance Transparency to the Market"

SK Group’s listed companies are significantly appointing female and professional manager-origin outside directors at their March general meetings of shareholders, strengthening board diversity and expertise. The proportion of outside directors on the boards will also increase further. This is the result of actively promoting the ‘Governance Story,’ a management agenda proposed by SK Group Chairman Chey Tae-won two years ago to enhance governance transparency.

SK Group announced on the 21st that 12 major listed affiliates held board meetings and recommended a total of 12 outside director candidates, planning to newly appoint them at the general meetings of shareholders by the end of this month. Among the candidates, seven are women and seven are former CEOs.

As a result, the total number of female directors on the boards of SK Group’s 12 major companies will reach 19 this year. The proportion of female directors rises to 21%, increasing 1.6 times over two years. The number of former and current business executives also increased to 14 (25%), raising the proportion of professional managers among outside directors by 1.8 times compared to two years ago (14%). When combining the proportions of women and professional managers among all outside directors, it represents a 3.5-fold increase compared to 2021.

SK Inc. recommended Park Hyun-joo, a senior foreign attorney at the law firm Sejong and an expert in mergers and acquisitions (M&A), as an outside director candidate. SK Innovation nominated Kim Ju-yeon, former Vice President of P&G Korea and Japan, and Lee Bok-hee, CEO of Rohm and Haas Electronic Materials CMP Korea.

SK Telecom appointed Oh Hye-yeon, head of AI research at KAIST, and SK Hynix selected Kim Jung-won, former Deputy Head and Chief Financial Officer (CFO) of Citibank Korea. SK Networks nominated Chae Soo-il, former Asia-Pacific Financial Sector Leader at Boston Consulting Group, while SKC proposed Chae Eun-mi, former President of FedEx Korea, and Kim Jung-in, CEO of Hyper Lounge, as outside director candidates.

The proportion of outside directors will also expand. This year, there will be a total of 56 outside directors, increasing their share from 60% last year to 63%. Conversely, inside directors will decrease to 22, down from 25% last year to 22%.

An SK official said, “Once the general meetings of shareholders conclude at the end of this month, the boards of SK’s major affiliates will further strengthen expertise, diversity, and independence,” adding, “Based on this, the boards will be able to lead corporate value creation.”

Choi Tae-won, Chairman of SK Group, is giving a lecture at the 'SK Directors Summit 2022' held at the Walkerhill Hotel in Seoul last October.
[Photo by SK]

Domestic major companies have been criticized for having a low proportion of female directors and a severe shortage of outside directors with business executive backgrounds compared to global companies. Since 2021, SK Group has been promoting the Governance Story proposed by Chairman Chey as a management agenda. This aims to strengthen ‘board-centered management’ beyond global standards. Chairman Chey emphasized, “The core is to prove governance transparency to the market and gain long-term trust.”

In this process, each SK affiliate’s board has taken on significant roles and responsibilities since 2021, including CEO evaluation and compensation. Accordingly, the SK SUPEX Council has actively carried out activities to strengthen board capabilities and support operations, such as ▲supporting outside director candidate recommendations ▲introducing a board work portal system ▲building and operating a board evaluation platform ▲regularizing the Director’s Summit.

An SK official stated, “We will continue to expand the infrastructure supporting board-centered management so that each affiliate’s board becomes the highest decision-making body that not only monitors and checks management but also leads corporate value creation.”