'SK Expansion Management Meeting' Chairman Chey Tae-won: "Improving Management Systems to Enhance Corporate Value"

Corporate Value Analysis Model, Reconstructing the Financial Story
Call to Establish 'SK Management System 2.0'

Chairman Cho Dae-sik: "Must Pursue Sustainable Growth, Not Rest on Past Achievements"
Emphasis on Continuous New Business Discovery

CEOs Recognize Severe Economic Conditions
Vigorous Discussions on Accelerating New Management System and Net Zero Implementation

Choi Tae-won, Chairman of SK Group, is making closing remarks at the '2022 SK Expanded Management Meeting' held on the 17th at Grand Walkerhill Seoul in Gwangjin-gu, Seoul. Photo by SK Supex Council

[Asia Economy Reporter Donghoon Jeong] Chey Tae-won, Chairman of SK Group, has ordered the restructuring of the financial story to maximize corporate value and the rebuilding of the management system. He pointed out the need to improve the organizational structure into the so-called 'SK Management System 2.0,' which is directly linked to corporate value, amid an uncertain management environment such as the global economic crisis.

Chey Tae-won: "We Must Upgrade to a Corporate Value-Based Management System"

According to SK Group, Chairman Chey emphasized at the '2022 Expanded Management Meeting' held on the 17th at the Grand Walkerhill Seoul in Gwangjin-gu, Seoul, that "the current financial story we have created and executed lacked linkage to corporate value," and added, "From now on, we must reorganize the financial story based on a corporate value analysis model and promote an upgrade to a new management system based on corporate value."

Chairman Chey specifically explained, "Corporate value consists of various elements such as economic value (EV) including financial performance and future growth potential, social value (SV), tangible and intangible assets, and customer value," and said, "The idea is to analyze which elements to enhance and which to focus on to increase corporate value, and then reorganize the financial story to secure greater trust and support from stakeholders, as well as continuous innovation and growth direction."

He pointed out that in the severe domestic and international economic crisis situations such as global supply chain disruptions and interest rate hikes, improving the overall management system including the financial story is necessary to bring about real change, overcome crises, and enhance corporate value.

SK's financial story is a strategy to accelerate growth by eliciting trust and empathy from stakeholders such as customers, investors, and the market based on a story that includes not only existing financial performance such as sales and operating profit but also attractive goals and concrete execution plans that the market can find appealing. Chairman Chey mentioned the need to promote this at the expanded management meeting in June 2020, and affiliates declared last year as the 'year of execution.'

Chairman Chey further emphasized, "Analyzing corporate value limited to the current business model or area can lead to stagnation," and added, "To increase corporate value, we must either find benchmarks or targets to follow or engage in bold management activities that break away from the current business model."

Finally, Chairman Chey stated that new key performance indicators (KPIs), resource allocation within the company such as investment, budget, and organization, evaluation and compensation, and stakeholder communication plans should also be reexamined in connection with the corporate value model analysis results. He urged, "Let us prove our hypothesis ourselves that creating a proper financial story and achieving it step by step to increase credibility will maximize corporate value."

From this perspective, SK plans to establish a group-level support foundation by reflecting the concept of a sustainable corporate value creation system, which all affiliates should commonly pursue, into SKMS (SK Management System), the group's management philosophy and practical methodology.

Chairman Cho Dae-sik: "We Need Bold Decisions on New Areas Without Settling for the Past"

Earlier, in his opening speech, Cho Dae-sik said, "Global leading companies have prepared for the next business even while their existing businesses were growing," and urged, "Do not settle for the past and strive to build a continuously growing company."

Chairman Cho presented various domestic and international corporate and historical examples, emphasizing, "Bold decisions in areas no one has dared to try, discovering new opportunities, and meticulous preparation over a long period are essential to leap to a global top-level company." He urged CEOs to make efforts to enhance corporate value through continuous efforts to discover new growth industries and considerations for a second financial story.

Meanwhile, about 30 people attended the expanded management meeting, including Chairman Chey, SK Senior Vice Chairman Choi Jae-won, SK Discovery Vice Chairman Choi Chang-won, Chairman Cho, seven committee chairpersons, and CEOs of major affiliates.

The CEOs shared their awareness of the economic crisis situation and engaged in heated discussions with external investment experts and academics on SK's new management system establishment and new business exploration methodologies.

The CEOs also sincerely exchanged opinions on checking the progress of the 'Net Zero' declaration one year after its announcement and ways to accelerate its implementation.

This content was produced with the assistance of AI translation services.