"Strengthening Board-Centered Management" SK Telecom Revamps and Enhances Board Subcommittees

“The Board as the Main Agent of Management”… Appointing CEO and Deciding Compensation Scale
Reorganized into Five Major Committees: Future Strategy, HR Compensation, Outside Director Nomination, ESG, and Audit

[Asia Economy Reporter Eunmo Koo] SK Telecom is strengthening its "board-centered management" to elevate the company's governance system to a global standard level.

On the 27th, SK Telecom announced that it has reorganized and reinforced its board subcommittees into five major committees responsible for future strategy, personnel and compensation, outside director candidate recommendation, ESG (environment, social, governance), and audit. The board, as the highest decision-making body, will take a leading role in overall company management. It appoints the CEO, reviews the appropriateness of compensation levels, approves and evaluates management plans and KPIs (key performance indicators), among other core functions. To perform these duties, it operates five committees with independence and expertise.

First, the "Future Strategy Committee" is responsible for approving and evaluating annual management plans and KPIs, and establishing mid- to long-term strategies to create SK Telecom's "Financial Story." It consists of five outside directors and one inside director. The "Personnel and Compensation Committee" reviews the CEO's reappointment and recommends candidates for new appointments to the board. It also reviews the compensation levels of the CEO and inside directors. It is composed of three outside directors and one other non-executive director.

The "Outside Director Candidate Recommendation Committee" manages the pool of outside director candidates and submits the final candidates to the shareholders' meeting. It consists of two outside directors and one CEO, with the chairman required to be an outside director to strengthen independence as stipulated in the regulations. Additionally, the "ESG Committee" manages the company's ESG business direction and performance and communicates with stakeholders. Given its role in realizing social value, it is composed entirely of outside directors (three members). Lastly, the "Audit Committee" expands its role beyond traditional accounting audits and compliance monitoring to include internal management diagnosis and ethical audits. To ensure independence and fairness, it is composed entirely of outside directors (four members).

Earlier, CEO Jung-ho Park officially declared at the 37th regular shareholders' meeting on March 25 that the company would establish advanced governance to gain greater recognition and support from stakeholders. Accordingly, a corporate governance charter was newly established in the articles of incorporation to reflect the commitment to transparent and sound governance, and the board-centered management system was strengthened. Following systematic preparations by the board and management, this board reorganization plan was completed.

Since 2012, SK Telecom has separated the roles of CEO and board chairman to secure the board's independence, and in 2018, appointed Director Young-min Yoon as the first female outside director. Furthermore, SK Telecom has maintained a majority of outside directors since 2009, before the amendment of the Commercial Act requiring outside directors to constitute the majority of the board.

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