SK bioscience Ltd. (the “Company”) shall achieve its ultimate goal of sustained progress by maintaining stability and growth. With this, the Company shall create value for its customers and shareholders, thereby contributing to social and economic development and human well-being.
The Company shall increase its corporate value and contribute to economic prosperity to create shareholder value, and furthermore, it shall grow along with the wider community through the creation of social values. At the same time, SK bioscience shall make a consistent effort to achieve harmony and balance between the happiness of its stakeholders and consider both present and future happiness to promote long-term sustainability.
SK bioscience acknowledges that the establishment of a sound and transparent governance structure is the key to realize such management philosophy. Accordingly, with the aim of establishing and maintaining a sounder corporate governance structure, the Company declares the “SK bioscience Corporate Governance Charter” as follows.
Article 1 (Rights of Shareholders)
① Shareholders shall have basic rights based on shareholders’ rights.
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 Company shall provide shareholders with adequate information on the date, place, and agenda of the general meeting of shareholders sufficiently in advance, and such date and place shall be determined to ensure that as many shareholders as possible attend the meeting.
④ Shareholders may propose agenda for the general meeting of shareholders in accordance with relevant laws such as the Commercial Act, and may question and demand explanation on the agenda at the general meeting of shareholders.
Article 2 (Fair Treatment of Shareholders)
① Shareholders shall have one vote for each common share, and the fundamental rights of shareholders shall not be infringed. In addition, any restriction on voting rights of specific shareholders shall be imposed strictly in accordance with the relevant laws.
② Shareholders shall be able to receive necessary information from the Company timely, sufficiently and fairly, and SK bioscience shall ensure that even such information for which the Company has no obligation to disclose be made available to all shareholders fairly
③ Shareholders shall be protected from unfair insider trading and self-dealings by the other shareholders such as controlling shareholders.
Article 3 (Responsibilities of Shareholders)
① Shareholders shall endeavor to exercise their voting rights proactively for the development of SK bioscience by recognizing that such exercise can affect corporate management.
② Controlling shareholders who have influence on the management of the Company shall act for the interests of the Company and all shareholders, and shall bear corresponding liabilities for any damage to SK bioscience and the other shareholders due to their act contrary thereto.
Article 4 (Roles of the Board of Directors)
① The Board of Directors shall have comprehensive rights over the management of the Company, and perform important management decision-making and supervision of the Company.
② The Board of Directors may delegate its power to the CEO or committees under the Board of Directors as defined in the laws, articles of incorporation, or regulations of the Board of Directors.
Article 5 (Composition of the Board of Directors and Appointment of Directors)
① The Board of Directors shall be of a size that allows for 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 are activated.
② The Board of Directors shall have independent directors who can function independently from the management and controlling shareholders, and the number of such directors shall be large enough for the Board to effectively maintain its independence (composed of at least three independent directors, and their number shall form the majority of the Board).
③ The Board of Directors shall be composed of directors from various backgrounds, and the directors shall not be discriminated against on grounds of gender, age, religion, nationality, race, disability, or level of education.
④ The Board of Directors shall be composed of competent persons with expertise so as to make substantial contributions to corporate management, and the term of office of the appointed directors shall be guaranteed unless any reason for disqualification exists.
⑤ The Company ensures that shareholders exercise their voting rights with adequate time to consider and sufficient information on the director candidates.
Article 6 (Operation of the Board of Directors)
① The Board of Directors shall hold the regular Board meeting at least once every quarter, and may hold an ad-hoc meeting when necessary.
② The regulations of the Board of Directors that specifically stipulate the authority, responsibilities, and operating procedures of the Board of Directors shall be established for the smooth operation of the Board.
③ The Company shall write up the minutes of every Board meeting and maintain and keep such minutes.
④ The Company shall disclose the activity details of individual directors, including each director’s attendance rate at the Board meeting, and yeas and nays on any major agenda subject to public disclosure.
⑤ Directors may participate in the Board meeting through means of remote communication if necessary.
Article 7 (Committees under the Board of Directors)
① The Board shall establish committees comprised of an adequate number of members to perform specific roles and functions under the Board of Directors.
② The majority of the members of the committees shall be comprised of independent directors.
③ The organization, operation and authority of all committees shall be stipulated. The committees shall report its resolutions to the Board of Directors.
Article 8 (Duties of Directors)
① Directors shall perform their duties with the duty of care as a prudent manager. The directors shall make reasonable decisions based on sufficient information by putting into time and effort.
② Directors shall not exercise their power for the interests of themselves or a third party, and always seek to achieve results for the best interests of the Company and shareholders thereof.
③ Directors shall not divulge any confidential information of SK bioscience learned during the performance of their duties to the outside, or use it for their own or third party's interests.
Article 9 (Responsibilities of Directors)
① Directors shall indemnify the Company when violating laws or the articles of incorporation, or neglecting their duties. Directors shall also indemnify any third party in case of bad faith or gross negligence on their part.
② 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 of the directors shall be respected.
③ SK bioscience 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.
Article 10 (Independent Directors)
① Independent directors shall not have a significant relationship with the Company and shall be able to make decisions independently from the management and controlling shareholders.
② The Company shall operate the Independent Director Candidate Recommendation Committee to fairly recommend such candidates. The committee shall be composed to ensure fairness and independence in recommending candidates for independent directors.
③ The Company shall provide sufficient information necessary for performing the duties of independent directors, and such directors may request the Company to promptly provide information necessary for carrying out their duties.
④ Independent directors shall devote sufficient time to fulfill their duties, and when a Board meeting is held, they shall attend after reviewing related materials in advance.
⑤ If necessary for performing their duties, independent directors may receive support from executives, employees, external experts, etc. through appropriate procedures, and the Company shall support the expenses incurred therefor.
Article 11 (Audit Committee)
① At least two-third of the members of the Audit Committee shall be composed of independent directors to maintain independence, and one of the members shall be the accounting or financial expert.
② The Audit Committee shall examine the legitimacy of the business process of directors and the management, verify the soundness and relevance of the Company's financial activities, review the appropriateness of the financial reporting process and accuracy of financial reporting, approve the appointment and dismissal of external auditors, and make follow-up reporting at a general meeting of shareholders.
③ The Audit Committee may freely access any information necessary for conducting the audit, and may request for advice from outside institutions and experts, if necessary, at the expense of SK bioscience.
④ The Audit Committee shall be held at least once every quarter, and may allow the management, finance executives, the head of the internal audit department and external auditors to attend, if necessary.
⑤ The Audit Committee will write up the minutes of every meeting.
⑥ Audit Committee members shall perform their duties independently from the management and controlling shareholders. Therefore, such members can only receive remuneration as a director and are not entitled to other compensation.
Article 12 (External Auditors)
① The Company shall ensure that external auditors maintain legal and practical independence from the Company, the management, and controlling shareholders.
② The Company may engage external auditors to participate in the general meeting of shareholders and provide explanation if shareholders have any question on the audit report.
③ The Company shall have an external auditor confirm if there is any inconsistency between the audit result including the audited financial statements and regularly disclosed information.
④ The Company shall make efforts for external auditors to identify any misconduct or unlawful act committed by the Company during the audit.
⑤ The Company shall engage external auditors to consider the sustainability of the Company as required by relevant laws, such as the 「Act on External Audit of Stock Companies」.
⑥ The Company shall engage the external auditor to report on important matters identified during the external audit to the Audit Committee.
Article 13 (Protection of Rights of Stakeholders)
① The Company shall endeavor to ensure the happiness of various stakeholders.
② The Company shall respect the rights of workers and improve the quality of life thereof.
③ The Company shall promote the establishment of a fair market order and the balanced development of the national economy through compliance with the laws related to fair trade.
④ The Company shall comply with the creditor protection procedures with respect to matters having significant influence on the status of creditors, such as merger, capital reduction, or spin-off.
⑤ In case the stakeholders concurrently hold the position of shareholders, their rights as stakeholders and shareholders shall be protected and exercised respectively.
⑥ The Company shall provide stakeholders with information necessary to protect their rights to the extent permitted by laws and regulations and contracts with third parties.
Article 14 (Disclosure)
① In addition to the disclosures required by laws and regulations, the Company shall disclose matters that may have significant influence on the decision-making of shareholders and stakeholders.
② Upon determination of important matters other than those subject to regular disclosure, the Company shall disclose such matters in detail and in a timely and accurate manner as stipulated by relevant laws and regulations.
③ The Company shall prepare a disclosure to be easy to understand and ensure easy access by the stakeholders.
④ The Company shall designate a disclosure officer, and have in place an internal data-sharing system to quickly deliver the Company’s crucial business information to such officer.
⑤ The Company shall disclose the stock ownership status of controlling shareholders and their affiliated persons in detail.
⑥ The CEO and CFO of the Company shall certify the accuracy and completeness of financial reporting.
⑦ The Company shall establish and publish ethical regulations.
Article 15 (Transaction of Corporate Management Rights)
① Activities that can cause changes to the corporate management rights such as acquisitions, mergers, spin-offs and transfers of important business shall proceed with transparent and fair procedures in place.
② The Company shall not sacrifice the interest of the Company or shareholders in the process of defending its management rights for the sake of certain shareholders or the management.
③ The Company shall grant the stock option right to shareholders who have opposed major structural changes, such as mergers and transfers of important business, at a fair price that reflects the real value of their shares as prescribed by law.
March 31, 2021
Article 1 (enforcement date)
This Charter shall come into force on March 31, 2021, as approved by the Board of Directors.