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Preamble
The ultimate purpose of SK chemicals (the “Company”) management is to ensure the happiness of those who choose SK (the “Members”) and the stakeholders of the Company with the belief that they can be happier when they work together at SK.
As the base and foundation for the Members to consistently pursue happiness, the Company shall continue to survive and prosper by achieving stability and growth.
For the happiness of stakeholders, the Company must keep developing social values and economic values. By improving a mutual trust relationship with stakeholders based on such value growth, the Company shall increase all corporate values (economic and social values) and achieve sustainable growth.
The values that the Company offers to stakeholders are as follows.
The Company shall:
Provide values to customers and continuously satisfy customers to gain trust, ultimately prospering along with customers.
Create a fair and competitive ecosystem with business partners, and lead mutual development through virtuous cycle cooperation based on the ecosystem.
Continuously create shareholder value to improve corporate value.
Fulfill roles that society needs, such as environmental protection, job creation, quality of life improvement, and contribution to the local community to grow with society.
Also, make efforts to find harmony and balance in the happiness of stakeholders, and consider both present and future happiness to promote long-term sustainability.
When the Company deems it necessary for the pursuit of happiness of its members and stakeholders and sustainable growth, SK Group (regardless of whether or not there is an equity relationship, consisting of member companies that share its management philosophy according to their own needs and judgment, and agree to cooperate with each other in management activities) can voluntarily decide to share and cooperate with member companies.
In this case, the Company shall endeavor to contribute to the survival and value improvement of the entire SK Group, including the Company, through mutual sharing and cooperation.
To ensure the permanent survival and development of the Company by realizing this management philosophy, the Company shall make continued efforts to establish sound and transparent governance based on responsible management centered on the Board of Directors and get it recognized externally.
The company declares the “SK chemicals Governance Charter” to follow through on the resolution of the Board of Directors with the intention of establishing the above management philosophy and a governance structure capable of realizing it.
April 27, 2022
SK chemicals
Part 1 BOD-centered responsible management
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Chapter 1 Roles and responsibilities of the Board of Directors
Article 1 (Goals)
① The Board of Directors should recognize that the ultimate management purpose of the company is to pursue the happiness of its members and stakeholders surrounding the company, and strive to achieve it.
② The Board of Directors should recognize that for the sustainable survival and development of the company, the happiness of its members and its stakeholders should be pursued at the same time, and this should be considered in the decision-making process.
③ The Board of Directors should recognize that more economic value can be obtained from stakeholders by providing the social value of the Company, and strive to develop a relationship of cooperation and trust between the Company and its stakeholders.
Article 2 (Responsibility)
① The Board of Directors is responsible for establishing and reviewing the Company's goals and management strategies to achieve the happiness and sustainable growth of its members and stakeholders.
② The Board of Directors should consider the ESG management policy in determining the allocation of management resources and capital.
③ The Board of Directors should strive to create a corporate culture that pursues sustainability, and for this purpose, check and review whether the purpose, value, management strategies, policies, and practices of the Company are consistent with the corporate culture that pursues sustainability.
Article 3 (Authority and Functions)
① The Board of Directors has broad authority over management of the Company.
② The Board of Directors must perform the management decision-making and management supervision functions of the Company. The main contents of the function to be performed by the Board of Directors are as follows:
1. Setting management goals and strategies
2. Reviewing accounting transparency and sustainability
3. Appointment and dismissal of the Representative Director and supervision of management
4. Evaluation of management performance and review of compensation level
5. Setting the direction of the ESG policy
6. Other decisions that have a significant impact on the Company or are related to external relationship of trust
③ The matters for deliberation and resolution of the Board of Directors are determined by the Board of Directors regulations
Article 4 (Insider trading and self-trading)
① The Board of Directors must have and supervise internal controls on insider trading and self-trading, and the transaction details must be disclosed according to a fair procedure.
② Acts that significantly affect the interests of the Company and shareholders, such as mergers, divisions and capital transactions between member companies, must be done through a due process and substantive fairness must be ensured.
③ The Board of Directors must record the basis for judging the procedural justification and substantive fairness of insider trading and self-trading in the Board of Directors' minutes.
Article 5 (Defense of Management Rights)
The Board of Directors must decide whether to accept the takeover attempt in consideration of the Company's sustainable development potential and shareholders' interests in due course.
Article 6 (Risk management)
① The Board of Directors should strive to systematically manage non-financial and financial risks, including ESG risks, for the sustainable growth of the Company.
② The Board of Directors should make efforts to prepare an effective internal control system for systematic risk management.
Article 7 (CEO Succession Policy)
The Board of Directors should discover and nurture those who will become the CEO, such as the Representative Director, and establish a system to prepare for the expiration of the CEO's tenure, his/her resignation, and other emergencies.
Article 8 (Remuneration Policy)
The Board of Directors should review whether the remuneration policy for the key management, including the Representative Director, is operated in line with the Company's sustainable growth and the long-term interests of shareholders.
Article 9 (Evaluation)
① The Board of Directors should prepare specific procedures for evaluating members of key management, such as the Board of Directors and the Representative Director, and conduct evaluations according to fair standards and objective indicators.
② The Board of Directors shall utilize the results of evaluation to improve the composition and operation of the Board of Directors.
Article 10 (Relationship with Member Companies)
① The Board of Directors may voluntarily decide to mutually share and cooperate with SK Group member companies if it is deemed necessary for the Company's management purpose and sustainable development.
② If the Board of Directors decides to share and cooperate with SK Group member companies, the Company can autonomously utilize the infrastructure provided by SK Group. It should make efforts to ensure the survival of SK Group, including the Company, and improve its value.
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Chapter 2 Roles and Responsibilities of Directors
Article 11 (Roles of Directors)
① Directors must perform their fiduciary duty and always pursue results that are in the best interest of the Company and its shareholders.
② The directors shall make reasonable decisions based on sufficient information obtained by putting in time and effort.
③ Directors must carefully review the materials related to the Company's pending issues and faithfully attend the Board of Directors.
④ If necessary, directors can ask management questions and provide opinions to them, and request advice from external experts.
Article 12 (Duties and Responsibilities of Directors)
① Directors shall not divulge any confidential information of the Company learned during the performance of their duties to the outside, or use it for their own or a third party's interests.
② Directors shall not exercise their authority for the benefit of themselves or any third party.
③ Directors shall indemnify the Company for any violation of laws or the Articles of Incorporation, or neglecting their duties. In this case, if the Director was intentionally or grossly negligent, he or she shall also be liable for damages to a third party.
④ In making management judgments, if Directors have collected and carefully and thoroughly reviewed considerable data and information that can be reasonably trusted, and then have performed their duties in a manner deemed to be in the best interest of the Company based on sincere and reasonable judgments, such management judgments by the Directors shall be respected.
⑤ The Company may purchase liability insurance for Directors at its expense in order to deal with claims of liabilities against the Directors and to recruit competent persons as Directors.
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Chapter 3 Composition of the Board of Directors
Article 13 (Appropriate Size of the Board of Directors)
The Board of Directors shall be of a size that allows effective and thoughtful discussion and decision-making, and shall be composed of a sufficient number of Directors to ensure that the committees under the Board of Directors actively complete their objectives.
Article 14 (Appropriate Number of Independent Directors)
The Board of Directors (including all shareholders, i.e., individuals, corporations, institutional investors, and those who have de facto influence over key management matters of the Company, e.g., the appointment and dismissal of executives regardless of their shareholding ratio; the same hereinafter) must have Independent Directors capable of performing functions independently from management and controlling shareholders, and the number must be large enough for the Board of Directors to maintain substantial independence from management and controlling shareholders and to supervise and check management decision-making process.
Article 15 (Professionalism of the Board of Directors)
The Board of Directors should be composed of competent persons with expertise who have appropriate experience and knowledge of the Company so that they can make a substantial contribution to management of the Company.
Article 16 (Diversity of the Board of Directors)
① To fulfill its roles and responsibilities, the Board of Directors should be structured so that knowledge, experience, ability, and gender can be harmonized to satisfy diversity goals.
② The Board of Directors shall ensure diversity to provide input from various viewpoints and make objective decisions through effective discussion.
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Chapter 4 Independent Director
Article 17 (Independence of Independent Directors)
① An Independent Director should be able to make decisions independently from management and controlling shareholders.
② An Independent Director should put efforts into making independent decisions on his/her own without being influenced by management and/or controlling shareholders.
Article 18 (Disclosure of the Independence of Independent Directors)
① Upon acceptance of the appointment, Independent Directors must submit to the Company a confirmation that it has no material relationship with the Company.
② The Company must confirm and disclose that an Independent Director candidate has no material relationship with the Company.
③ If there is a change in the items in the confirmation letter in Paragraph 1 after an Independent Director takes office, the Independent Director must immediately submit a revised confirmation letter, and the Company must disclose it.
Article 19 (Prohibition of Excessive Concurrent Positions and Non-Competition)
① No Independent Director shall hold an excessive number of concurrent positions in order to faithfully perform his/her duties.
② An Independent Director shall not engage in economic transactions related to the business of the Company for which he is the Independent Director, or hold concurrently the position of an Independent Director of another company in the same industry.
Article 20 (Performance of Duties)
① An Independent Director should dedicate sufficient time to performing his/her duties to gather information on decision-making matters and to carefully review the data provided by the Company.
② If the data provided by the Company is insufficient, an Independent Director must obtain and review the necessary data on his/her own, such as by reading ledgers and related documents.
③ An Independent Director shall endeavor to obtain necessary information from various stakeholders inside and outside the Company, including shareholders, and to collect various views on the Company's management.
Article 21 (Providing Information on Independent Directors)
① Management, including the CEO, must provide the necessary information in a timely and sufficient manner so that Independent Directors can know exactly the company's management status. In particular, when the Board of Directors is convened, relevant information must be provided in advance so that Independent Directors can fully review the proposed agendas.
② An Independent Director may request the person in charge at the Company to provide information necessary for performing his/her duties in order to present an opinion on the company's management goals or strategic decisions.
③ The Company may designate a department within the Company to respond to an Independent Director's request for information.
Article 22 (Provision of External Experts’ Support)
An Independent Director may, if necessary, receive support or advice from executives, employees, or external experts at the Company's expense within a reasonable range through appropriate procedures.
Article 23 (Provision of Sufficient Educational opportunities)
① The Company must provide sufficient training opportunities for Directors to perform their roles efficiently.
② Directors must regularly attend internal and external training for efficient performance of their duties, and invest sufficient time and effort for a correct understanding of their duties and desirable performance of their duties.
Article 24 (Communication between Independent Director and Management)
The Company shall endeavor to provide an opportunity for Independent Directors and management to consult regularly on management issues.
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Chapter 5 Operation of the Board of Directors
Article 25 (Regular Board Meetings)
① In principle, board meetings should be held regularly, and in principle, a regular board meeting should be held at least once a quarter.
② The Company must set the annual schedule for the Board of Directors in advance for the efficient operation of board meetings.
Article 26 (Operation of the Board of Directors)
① The Board of Directors shall give all Directors an equal opportunity to express their opinions.
② The Board of Directors shall ensure opportunities for participation by providing telecommunication means (voice or video and voice) in case some Directors are unable to physically attend board meetings.
③ The Company shall take and retain the minutes of every Board meeting.
Article 27 (Roles of the Chairperson of the Board of Directors)
① The Chairperson of the Board of Directors should continuously check whether the Company established transparent and sound governance, and seek ways to develop it.
② The Chairperson of the Board of Directors should encourage a culture of active discussion, lead the Board of Directors constructively, and support Independent Directors participation in decision-making based on accurate and timely information.
③ The Chairperson of the Board of Directors shall strive to build a constructive relationship between Directors and between Directors and management, and may propose to the Company ways to enable each Director to quickly and easily obtain the information needed for decision-making in a timely manner.
Article 28 (Delegation of the Board of Directors’ Authority)
The Board of Directors may delegate its power to the Representative Director or committees under the Board of Directors as defined in the laws or Articles of Incorporation.
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Chapter 6 Committees under the Board of Directors
Article 29 (Establishment and operation of committees within the Board of Directors)
① The Board of Directors may set up a committee composed of an appropriate number of people who perform specific functions and roles within the Board of Directors to increase the professionalism and efficiency of job performance.
② Committees within the Board of Directors must secure independence by ensuring that a majority of committee members are Independent Directors. However, more than two-thirds of the members of the Audit Committee shall be Independent Directors in accordance with the laws and regulations.
③ Independent Directors should refrain from joining more than three committees in order to devote sufficient time and effort to board activities.
Article 30 (Roles of the Audit Committee)
The Audit Committee shall supervise Directors and management to check that they are doing their jobs legally and properly.
Article 31 (Roles of the Independent Director Nomination Committee)
The Independent Director Nomination Committee recommends Independent Director candidates for appointment at the general meeting of shareholders.
Article 32 (Roles of the Personnel Committee)
The Personnel Committee shall review the evaluation of the Representative Director and whether he/she should remain in office, and review the adequacy of Internal Directors’ amount of remuneration.
Article 33 (Roles of the ESG Committee)
Based on its expertise, the ESG Committee shall provide the Board of Directors with advice and review on management strategies and ESG direction for the Company's sustainable growth.
Part 2 Shareholders
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Chapter 1 Shareholders’ rights
Article 34 (Shareholders’ rights)
① The basic rights of shareholders cannot be deprived or restricted by the Articles of Incorporation, the general meeting of shareholders, or a resolution of the Board of Directors.
② As owners of the Company, shareholders can participate in the Company's distribution of profits and residual properties, and exercise their voting rights by attending the general meeting of shareholders.
③ Shareholders have the right to receive sufficient information in a timely manner from the Company to exercise shareholder's rights, and the Company shall faithfully comply with the shareholders' request to provide such information unless there is a justifiable reason to do otherwise.
Article 35 (Protecting the stockholder's right)
① The Company shall guarantee all shareholders one vote per share, and the voting rights of specific shareholders should be restricted in accordance with the provisions of the law.
② Any matter that brings significant changes to the existence of the Company and shareholders’ rights shall be determined at the general meeting of shareholders in a way to ensure shareholders’ rights to the maximum extent possible.
③ The Board of Directors shall make efforts to ensure that shareholders who oppose major structural changes such as mergers and business transfers can exercise their rights to purchase stocks at a fair price that reflects the real value of their shares as prescribed by law.
Article 36 (Responsibilities of Shareholders, Etc.)
① Shareholders shall endeavor to exercise their voting rights proactively for the development of the Company by recognizing that such exercise can affect corporate management.
② If the controlling shareholders infringe the rights of other general shareholders by acting contrary to the interests of the Company and all shareholders, they should be held accountable accordingly.
③ The Company must ensure the exercise of the rights of minority shareholders to prevent controlling shareholders from abusing their control rights and protect the interests of the shareholders as a whole.
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Chapter 2 General meeting of shareholders
Article 37 (Topics and Agendas)
① The Company should endeavor to ensure that topics such as ESG management can be discussed as agenda items at general meetings of shareholders.
② The Company shall fully explain the agenda items to shareholders and give them an opportunity to ask questions before resolutions are made at a general meeting of shareholders. If shareholders intend to interfere with the progress of the meeting or if they ask duplicate or unreasonable questions, an exception shall be made.
Article 38 (Date, Place, Etc.)
① The Company must provide sufficient information about agenda items so that shareholders can review them in advance.
② The Company shall determine the date and place of the general meeting of shareholders so that as many shareholders as possible can attend, and notify the shareholders of the time and place of the general meeting in writing or electronically sufficiently in advance.
Article 39 (Appointment of Directors)
① The Company shall strive to listen to the opinions of various shareholders in the process of selecting Director candidates and appointing Directors.
② The Company shall appoint one Audit Committee member separately from other Directors to enhance the independence of the Audit Committee.
Part 3 Audit
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Chapter 1 Internal audit
Article 40 (Enhancing the Independence and Professionalism of the Audit Committee)
① The Audit Committee must be composed of at least three members in order to function smoothly as a meeting body, but all members are Independent Directors to maintain objectivity and independence at the same time.
② Audit Committee members shall not receive any compensation other than remuneration from management and controlling shareholders for independent auditing.
③ To enhance the Audit Committee's professionalism, all Audit Committee members must have basic knowledge about auditing, and at least one of the members shall be appointed as an accounting or financial expert according to the law.
④ Audit Committee members should receive regular audit-related training.
Article 41 (Operation of Audit Committee Meetings)
① To secure the effectiveness of the quarterly report system, the Audit Committee must hold a meeting at least once every quarter.
② The Chairperson of the Audit Committee may request management, financial executives, the head of the Internal Audit Department, external auditors, etc. to attend the Audit Committee, and may invite relevant external persons depending on the case.
Article 42 (Right of Access to Information, Etc.)
① To fulfill the duties of the Audit Committee, members of the Audit Committee should be able to freely access information necessary for auditing.
② Apart from Paragraph 1, members of the Audit Committee should endeavor to collect information and exchange opinions through personal contact with management, Internal Audit Department staff, and external auditors.
③ The Audit Committee may seek assistance or advice from accountants, lawyers, and other external experts as well as the cooperation of employees or external auditors while performing their duties.
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Chapter 2 External audit
Article 43 (Maintaining the Independence of the External Auditor)
The Company shall ensure that external auditors maintain legal and substantive independence from the Company and its management, controlling shareholders, and consolidated parent and subsidiary companies.
Article 44 (External auditor’s Attendance at the General Meeting of Shareholders)
The Company shall invite external auditors to attend the general meeting of shareholders to faithfully answer and explain the questions of shareholders related to the submitted audit report.
Article 45 (Communication with External Auditors)
① The Audit Committee should discuss the external auditing situation with external auditors from time to time, and review and discuss important matters confirmed by external auditors during external auditing activities.
② The Audit Committee should meet with external auditors at least once a quarter without management's attendance to discuss major issues related to external auditing.
Part 4 Communication with Shareholders and Stakeholders
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Article 46 (Direct Communication with Shareholders and Stakeholders)
The Board of Directors and management shall pay attention to the requirements or concerns of shareholders and stakeholders in order to contribute to the continuous and stable growth of the Company, and, if necessary, make efforts to communicate directly with shareholders and stakeholders on various topics such as ESG management.
Article 47 (Disclosure of Information)
① The Company shall endeavor to equally provide all shareholders with corporate information that may affect corporate value.
② The Company must strive to actively respond to stakeholders' requests for information provision within the scope permitted by law for sustainable growth and the happiness of stakeholders.
③ In addition to the disclosures required by laws and regulations, the Company shall disclose or announce matters that may have significant influence on the decision-making of shareholders and stakeholders. However, this is not the case for matters that are trade secrets.
Article 48 (Accessibility of Information Disclosure)
① The Company shall publish information disclosures, such as business reports, audit reports, business reports, and IR materials, on the Company's website for easy access.
② The Company should use easy-to-understand terms as much as possible to make information disclosures easy to understand.
Article 49 (Designation of the Disclosure Officer, Etc.)
① The Company must designate a Disclosure Officer to perform effective disclosure tasks, and establish an internal information delivery system so that important information of the Company can be delivered to the Disclosure Officer quickly.
② The Company must ensure that its Disclosure Officer completes training on disclosure.
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Addendum
Established on March 31, 2021
This Charter shall go into effect on March 31, 2021, as approved by the Board of Directors.
Fully amended on April 27, 2022
This Charter shall go into effect on April 27, 2022, as approved by the Board of Directors.