[4 Major Groups Control Tower] 10 Years Since Launch, SK Supex Chairman Jodaesik, Financial Expert, Oversees Group Finance and Strategy

On the morning of the 29th, the CEOs of SK Group gathered in the large conference room on the 29th floor of the SK Seorin Building in Jongno-gu, Seoul. The meeting, chaired by Chairman Cho Dae-sik, usually lasts about two hours. It is the regular monthly meeting of the SUPEX Pursuit Council. SUPEX is an abbreviation for ‘Super Excellent Level,’ meaning the highest level achievable by human capability. It is a term coined by the late SK Group Chairman Choi Jong-hyun himself. It represents SK’s unique management techniques and corporate culture.

This meeting is a place to share group agendas that C-level executives need to know. It reviews global market trends such as carbon neutrality, alternative meat, bio, and batteries, and discusses areas that require business support. For technologies like artificial intelligence (AI), which is the world’s biggest topic, experts from the group’s research institutes attend the meeting to directly explain to the CEOs. The SUPEX Pursuit Council has set the group’s green business direction through the establishment of the Environmental Business Committee. As part of this, it has promoted the establishment of the Green Techno Campus and the launch of the Green Campus.

SK Group operates with a unique structure where the SUPEX Pursuit Council acts as the control tower. This system is unprecedented in the domestic business community. While other groups have holding companies perform this role, SK Group entrusts it to the SUPEX Pursuit Council. Chairman Choi Tae-won is not included in this highest decision-making consultative body within the group. Although Chairman Choi does not receive frequent reports on the meeting contents, his management style of frequently meeting one-on-one with each affiliate CEO naturally keeps him informed.

Choi Tae-won, Chairman of SK Group, is delivering the keynote speech at the '2023 Expanded Management Meeting' held on June 15 at the Grand Walkerhill Seoul in Gwangjin-gu, Seoul. [Photo by SK Group]

This year marks its 10th anniversary. The history of the SUPEX Pursuit Council dates back to 1974 with the launch of the core organization, the SK Restructuring Headquarters, under the Management Planning Office. In 2003, SK Group faced turmoil when the hedge fund ‘Sovereign’ acquired 14.99% of SK shares, becoming the largest shareholder and threatening management control. In the process of defending against foreign capital attacks, the need to innovate the governance structure grew, leading to the dismantling of the Restructuring Headquarters. In the same year, coordination tasks among affiliates were transferred to SK Inc. and SK Telecom. Subsequently, in 2007, the group transitioned to a holding company system, with SK Inc. making important group decisions. In 2012, SK acquired Hynix, and as the group needed to expand its business globally in earnest, an efficient group decision-making system became necessary. In the following year, 2013, the SUPEX Pursuit Council was established for ‘Separate yet Together 3.0’ management. ‘Separate yet Together’ means that each affiliate autonomously makes management decisions ‘separately,’ but for major business initiatives or new market entries requiring group-level capabilities, a specialized committee supports ‘together’ management decisions simultaneously.

This approach originated from Chairman Choi’s belief that it is necessary to have a management method where experts from various fields gather to comprehensively review rather than having the holding company unilaterally decide the group’s management direction. It means utilizing the collective intelligence of professional managers to reach the optimal conclusion through double or triple discussions. At a CEO seminar in October 2012, when setting new management policies, Chairman Choi said, “From now on, companies should neither ask the holding company about their own affairs nor bring them up.” As Chairman Choi is freed from domestic affiliate tasks, he focuses on leading company-wide growth by driving global growth strategies and networking with overseas senior executives.

SK operates the SUPEX Pursuit Council through seven committees. Each affiliate CEO is given the authority of a SUPEX Pursuit Council committee chair to strengthen responsibility. Even if not a chair, the 20 affiliate CEOs belonging to the council are assigned to each committee in overlapping groups of five to ten members. For example, the Communication Committee includes CEOs from SK Telecom, SK E&S, SK Ecoplant, SK Chemicals, SK Gas, and SK Enmove. Each committee meets monthly.

The SUPEX Pursuit Council has also handled affiliate CEO evaluations and major executive appointments. The Talent Development Committee reviews and delivers recommendations to each company’s board of directors, which makes the final decision. However, since 2021, it has only played a supporting role in individual company board decisions. Beyond monitoring management including the group head, the board of directors now handles major management activities such as CEO candidate recommendations, CEO evaluations and compensation, and mid- to long-term group growth strategy reviews. Although the authority of affiliate boards has increased, the SUPEX Pursuit Council still maintains its presence. Recommending outside director candidates is one of the council’s support tasks. It has also established and operates a board evaluation platform, assessing board activities and performance through various indicators and suggesting improvements.

Cho Dae-sik, Chairman of the SK Supex Council, is heading to the conference room to attend the '2023 Expanded Management Meeting' held on the morning of June 15 at the Walkerhill Hotel in Gwangjin-gu, Seoul.
[Image source=Yonhap News]

At the center of the SUPEX Pursuit Council is ‘financial expert’ Chairman Cho Dae-sik. Born in 1960, he is the same age and an elementary and university classmate of Chairman Choi, who personally recruited him as SK’s finance executive in 2007. Before joining SK Inc., he served as CFO of Samsung C&T’s trading division. Within six years of joining SK Inc., he was promoted to president and has led the discovery of new growth businesses such as new drug development, pharmaceutical production, and semiconductor materials, enhancing the corporate value of affiliates. He is called the ‘group’s number two.’ Since his first appointment as chairman in 2017, he has been reappointed four times. He concurrently serves as chairman of the Strategy and Global Committee, a core part of the SUPEX Pursuit Council. The Strategy and Global Committee handles the financial and strategic functions of group affiliates, discovering new business opportunities and coordinating CEOs.

The Talent Development Committee is chaired by Park Sang-gyu, president of SK Enmove, who joined Yukong in 1987. Yoo Young-sang, president of SK Telecom, chairs the ICT Committee; Cho Kyung-mok, president of SK Energy, chairs the SV (Social Value) Committee; and Jang Yong-ho, president of SK Siltron, chairs the Environmental Business Committee. The Communication Committee and Governance Committee are chaired by President Lee Hyung-hee and President Yoon Jin-won, respectively. The Communication Committee acts as the group’s eyes, ears, and mouth, swiftly responding to internal and external situations and facilitating external cooperation to successfully carry out the group’s economic, social, and media agendas. The Governance Committee, equipped with legal functions, supports board and shareholder-centered management. The entire organization comprises about 100 members, including team leaders and staff.

SK Group’s management transformation is ongoing. Chairman Choi, who will mark his 25th anniversary in office on the 1st of next month, emphasized the need for radical change for corporate survival with his inaugural message: “Will it be an innovative change (Deep Change), or a slow disappearance (Slow Death)?” The total assets of SK Group, which were about 32.8 trillion won in 1998 when Chairman Choi took office, have grown tenfold to approximately 327.3 trillion won as of May this year. The group’s ranking in the business community rose from fifth to second, following Samsung.

SK Group plans to strengthen the ‘Governance Story,’ a management theme and governance innovation strategy proposed by Chairman Choi. He said, “The core of the Governance Story is to prove governance transparency to the market and thereby gain long-term trust.”

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