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Governance reforms

SK Holdings to empower directors to pick and oust CEO

By Mar 26, 2021 (Gmt+09:00)

SK Group Chairman Chey Tae-won
SK Group Chairman Chey Tae-won

South Korea's SK Holdings Co. will give outside directors more authority to get involved in the selection and dismissal of its chief executive and independent board members, alongside reviews of investment proposals based on environmental, social and governance (ESG) standards.

The holding company of the energy-to-telecom group said on Mar. 25 that it will set up both personnel and ESG committees under its board of directors, in addition to the two existing committees in charge of auditing and internal regulation revisions.

Its governance reforms come as the third-largest conglomerate in the country has been shifting from its traditional and once flagship businesses to focus on new growth areas such as electric vehicle batteries, hydrogen fuel, bio and chips.

The personnel committee to be set up will be entitled to recommending and appraising SK Holdings' CEO. It will also be allowed to call for CEO replacement in the middle of the term, if he or she falls short of expectations.

The ESG committee is taking over the role of the group's existing governance committee to take ESG factors into consideration for investment decisions.

SK Holdings will launch the two committees next month, once approved at its Mar. 29 annual general meeting and the Mar. 30 board meeting. CEO Chey is the single largest shareholder in the holding firm with an 18.44 stake as of the end of last year.

Graphics by Jerry Lee
Graphics by Jerry Lee

Compared with other Korean companies, SK Holdings's board has already been given more authority. The company put every investment decision worth more than 130 billion won ($115 million), or over 1% of its equity capital, under the review of the audit and governance committees.

Its initiative in corporate governance will likely prompt other SK Group units to follow suit.

SKC Co., a chemical materials maker, has launched the committees for internal transactions, ESG, personnel and audit under the direct control of the board of directors chaired by an outside director.

SK Innovation Co., an electric vehicle battery producer, has empowered outside directors to chair its board of directors since last year. 

Write to Jae-Kwang Ahn at

Yeonhee Kim edited this article.
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