'Mugunghwa Trust Controversy' SK Securities Expands Board-Centered Management System... Strengthens Responsible Management

SK Securities, which became embroiled in controversy after issuing a large-scale stock-collateralized loan to the chairman of Mugunghwa Trust, has decided to further solidify its board-centered proactive decision-making system, thereby reinforcing its commitment to enhanced "responsible management."

According to SK Securities on January 29, this decision focuses on elevating the board's role from merely approving management's decisions after the fact to serving as a core body that leads real management oversight and risk management.

The SK Securities board consists of a total of seven members: two internal directors (co-CEOs Jeon Woojong and Jeong Junho), four outside directors, and one other non-executive director. Outside directors make up the majority (about 57%), exceeding the legal requirement.

In particular, SK Securities has modernized its governance structure by separating the roles of board chair and CEO. The board chair role is held by outside director Ko Gwangcheol, rather than an internal director. This system was established to prevent unilateral decision-making by management and to enable objective oversight of key issues.

The company also strengthened board-centered management through organizational restructuring. The Financial Consumer Protection Office, Information Security Office, and Audit Office were all elevated to headquarters status, with a focus on enhancing internal controls and customer protection functions. According to the company, this move empowers operational departments so that decisions made by board committees (such as the Audit Committee, ESG Committee, and Internal Control Committee) can be implemented immediately and effectively in the field. This reflects the company's intention to ensure that the board's supervisory function translates into practical risk management rather than remaining a mere formality.

This measure is interpreted as an additional response to the recent controversy, where SK Securities issued an abnormal stock-collateralized loan of about 100 billion won to Oh Changseok, chairman of Mugunghwa Trust, putting the company at risk of losing the principal and fueling debates over internal controls and other issues. Previously, SK Securities stated, "SK Securities' management activities are completely independent from the decision-making structure of the largest shareholder," and, "This investment decision was a normal financial investment business with no legal flaws in either the procedures or the collateral." The company also explained that, although the board's procedures were not followed, "the loan was executed after a resolution by the internal risk management executive committee."

An SK Securities representative stated, "Elevating the internal control function to an independent and clearly defined organizational unit through the recent restructuring is a key piece in completing board-centered management," adding, "We will continue to fulfill our responsibilities as a trusted financial institution by practicing responsible management that meets the trust of shareholders and customers, based on transparent governance."

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