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Business Ethics and Compliance

Business Ethics and Compliance

Business Ethics

Code of Ethics

SK bioscience has established the principles of business ethics under the belief that ‘transparency is the key prerequisite for sustainable management’ based on the Code of Ethics. The code reflects the fundamental philosophy of the SK Management System(SKMS)?SK’s management philosophy and principles of behavior. The Code of Ethics, which was established in consideration of various stakeholders, serves as the standard for employees’ decision-making and behavior in all management activities.

Code of Ethics by Stakeholders

  • Customers

    The company shall continue to satisfy and gain the trust of customers and ultimately Customers grow with them.

  • Business Partners

    The company shall grow together with its business partners and compete with its Business competitors in a fair and equitable manner.

  • Employees

    The company shall create an environment in which employees can work willingly and enthusiastically. Employees shall contribute to the growth of the company and the creation of value for stakeholders.

  • Society

    The company shall contribute to the development of society through social and cultural activities, as well as economic development, and comply with social norms and ethical standards.

  • Shareholders

    The company shall increase its own value so as to create shareholder value and to this end, it shall enhance transparency and conduct efficient management.

Practice Guidelines for the Code of Ethics

SK bioscience’s Code of Ethics Practice Guidelines outline the ethical behavior and compliance obligations of our employees. All of our employees adhere to these guidelines, and we actively encourage our stakeholders to do the same. Recognizing the need to supplement and revise the guidelines in recent years, we made efforts to refine them in 2022. The revised guidelines have become more specific and clear, and they now include case-based FAQs to assist employees in better understanding and utilizing them.

SK bioscience’s Practice Guidelines for the Code of Ethics

  • Code of Conduct

    Diligent performance of tasks/Prohibition of conflicts of interest/ Protection of the company’s assets and information /Antibribery and corruption /Respect for other employees

  • Attitude toward Customers

    Customer-centered management/Protection of customer information

  • Our Responsibility toward Employees

    Human-centered management/Safety and happiness of employees

  • Relationship with Business Partners

    Win-win management/ Fair competition with competitors

  • Role in Society

    Eco-Friendly management/ Corporate Philanthropy

  • Compliance

    Compliance with fair trade laws and regulations/Fair trade practices under the principle of free competition

  • Our Responsibility toward shareholders

    Enhancement of corporate value/Protection of shareholder rights

Strengthening Capabilities of Business Ethics/Compliance

SK bioscience regularly conducts various forms of ethics training to ensure that all employees understand and practice the purpose of the Code of Ethics effectively. The SK Group Online training program provides sessions to enhance employees’ ethical decision-making abilities by raising awareness of issues like the misuse of corporate credit cards, abuse of power, and hospitality/entertainment. Additionally, regular compliance training is conducted for the sales and marketing divisions. New hires are required to complete compliance training, and we strive to establish an internal compliance culture by conducting other training programs as needed. In 2022, we held company-wide business ethics training, discussion workshops, and compliance training for the sales and marketing divisions.

Ethics Training

  • Group Online Training(once/1yr)

    • Prohibition of the misuse of corporate credit cards, abuse of power, and hospitality/entertainment

  • Regular/Occasional CP Training

    • Employees(twice/1yr), new/experienced hires(occasional training)

  • Business Ethics Practice Survey

    • 23 questions regarding compliance with the Code of Ethics and Business Ethics Practice System

  • Business Ethics Practice Workshop

    • 58min discussion training/ improving ethical decisionmaking ability of employees facing dilemmas
Business Ethics Reporting System

All stakeholders of SK bioscience can report unfair behavior and matters that undermine business ethics through various channels. The content of the report and the identity of the informant are strictly protected, and any disadvantages to the informant are strictly prohibited. Once a report is received, we conduct a thorough and clear investigation to establish the facts. Subsequently, we take follow-up measures such as disciplinary action, and conduct systemic improvements in accordance with our regulations andp rocedures.

How to Report(Channel)

Violations of the Code of Ethics and the Practice Guidelines for the Code of Ethics can be reported through the counseling & reporting link on the SK Business Ethics website and SK bioscience website, via email, mail, telephone, or in person.

What to Report

  • Corruption and abuse of power in business relationships

    Giving or receiving money/hospitality, personal requests, equity investment, unfair instructions, verbal abuse/assault, etc.

  • Conflicts of interest

    Negligence of work such as having sideline jobs or conducting excessive personal business during work hours, loans for employees, investment using internal information, transactions with the persons in special relationships, etc.

  • Lack of respect among Employees

    Verbal abuse, assault, sexual harassment, bullying, exclusion from work, personal errands, etc.

  • Damage to social values

    Non-compliance with environmental/ safety/health/quality regulations, disrespect to the socially disadvantaged, leakage of customer information, provision of false information to customers, etc.

  • Inappropriate business practices

    False report, performance manipulation, unethical sales practices, embezzlement, improper use of expenses and assets, information leakage, etc.

  • Violation of the law

    Violation of the Fair Trade Act and other laws, etc.

Ethics Reporting Channels
윤리경영 제보 채널
Division in charge Ethics Management Team
Website SK Ethical Management
E-mail skbioscience.ethics@sk.com
Phone 02)2008-2338
Address SK bioscience Co., Ltd. Ethics Management Team, 310 Pangyo-ro (Sampyeong-dong), Bundang-gu, Seongnam-si, Gyeonggi-do
Reporting Status and Actions Taken

SK bioscience monitors ethics-related issues by thoroughly investigating and taking appropriate disciplinary measures when employees violate the Code of Ethics and the Practice Guidelines for the Code of Ethics. In 2022, the total number of reports received through the reporting channel was 19, and the cases included negligence of duty, abuse of authority, and unethical sales practices. Each case was investigated following the report handling process, and appropriate measures were taken, including suspension, reduction in pay, and written recommendations. For online reports received, we provide appropriate responses and guidance, and informants can check the results of the process on the SK Business Ethics website. In addition, we send out the Business Ethics Practice Letter to all employees every other month which provides detailed information on the informant protection system.

Report Processing

  • 1. Receipt of Reports

    Registration of reports

  • 2. Review of Reported Content

    Review of the reported information and determination of the Investigator

    (If the report is not eligible for further investigation, it may be excluded from the investigation or transferred to a relevant division that is dedicated to the subject matter. The investigation results will be notified to the informant through the ‘Report Processing Results’ menu.)

  • 3. Basic Investigation

    Initiation of a basic investigation based on the reported information

    (If it is difficult to conduct an investigation because the report is not specific enough, or if additional information is required, we contact the informant through the ‘Report Processing Results’ menu.)

  • 4. Investigation

    An investigation plan is established and the investigation is carried out

    (If a detailed investigation is necessary)

  • 5. Closure

    End of investigation after verification of the authenticity of the report

    (If follow-up measures are necessary measures such as disciplinary action and system improvement are implemented.)

Compliance Division and Structure

Audit Committee

SK bioscience operates the Audit Committee under the Board to strengthen the audit function and enhance management transparency. The Audit Committee audits SK bioscience’s accounting and finance, as well as its overall business, in accordance with laws and regulations. It not only oversees that the directors and management are performing their duties legally, but also provides assistance in responding to commercial law requirements and regulations related to listed companies. It also receives reports on the operation status of the company’s compliance program and internal accounting management system from the Compliance Team and reviews their appropriateness. Our Audit Committee is fulfilling its responsibilities and duties to establish more professional and transparent governance.

Compliance Team

SK bioscience has established a company-wide compliance management system and operates related programs. The head of the company’s Office of Legal Affairs is appointed as the Chief Compliance Officer of the Compliance Team, responsible for planning, implementation, evaluation, and supervision of the entire process of the voluntary compliance program. In addition, the Chief Compliance Officer oversees businessrelated activities such as pharmaceutical compliance activities and programs to raise the level of awareness of voluntary fair trade compliance among all employees. We operate a dedicated compliance division(Ethics Management Team) to establish a compliance system, monitor and investigate reports. The team also makes efforts to prevent compliance violations in advance by providing compliance-related training and imposing penalties for violations. Recently, due to changes in the company’s business environment, we have recognized the need for an internal audit function to check the internal business system, and thus, expanded the roles of the Ethics Management Team to include this function. In addition, we are doing our best to practice business ethics throughout the company by preparing governing audit regulations and securing personnel capable of conducting internal audits to conduct independent audits.

CP Organizational Chart

  • The Board of Directors

  • Audit Committee

  • The Head of the Office of Legal Affairs
    (The Chief Compliance Office/Compliance Officer)

  • Ethics Management Team

Compliance Program

SK bioscience operates a Compliance Officer System in conjunction with the Fair Trade Voluntary Compliance Program and encourages employees to voluntarily comply with laws and regulations by training them through programs and conducting follow-up inspections. In addition, SK bioscience has established and implemented compliance guidelines, the highest regulation for compliance activities, through a resolution of the Board of Directors. It monitors compliance training and adherence to the compliance guidelines and reports to the Board once a year on a regular basis. We encourage our employees to practice business ethics by creating and distributing compliance-related company rules/manuals. We update detailed guidelines from time to time and provide relevant training. In case of any violation of compliance regulations by employees, sanctions are taken following the internal disciplinary procedure. In addition, we operate a counseling/reporting channel and an informant protection system which are constantly informed to employees.

Internal Accounting Control System(IACS)

SK bioscience operates an Internal Accounting Control System(IACS) in accordance with the External Audit Act. As our IACS auditor certification level was raised from review to audit following the IPO in 2021, so we upgraded our IACS to reinforce transparency in corporate accounting and management. SK bioscience operates the IACS to prepare and disclose reliable accounting information, not to merely maintain a system to comply with legal requirements. To operate the IACS, we have established relevant regulations and guidelines and assigned our IACS Part to conduct design evaluation and operation evaluation to check all aspects of internal control. Through these procedures, we examine the approval process of major sales, production, financing, and accounting that affect corporate financial statements. Additionally, we effectively respond to external factors that may affect the business, such as changes in accounting standards. SK bioscience’s activities related to the IACS are verified annually by a third-party external auditor(accounting firm), and the CEO reports relevant matters to the general meeting of shareholders, the board of directors, and the audit committee for each business year. We also provide IACS training to employees and the audit committee to strengthen internal control and improve awareness at the company level.

Compliance Risk Management System

SK bioscience operates a compliance risk management system based on the belief that a company’s competitiveness can only be proven when it secures a competitive advantage in the market while adhering to laws and regulations. In addition, we practice business ethics and compliance management by implementing our Prevent-Detect-Respond framework. This approach helps us avoid profits from unethical business practices and lays the foundation for a fairer and more transparent company. We established compliance regulations and regularly conduct annual business ethics and compliance training, as well as business ethics practice surveys and business ethics pledges, to prevent risks and internalize ethical practices in our employees. Additionally, we operate a monitoring system that continuously checks reporting channels and marketing cost execution. We conduct business ethics practice surveys to evaluate the level of ethical practices, and the results are reflected to improve the compliance management system. If violations are identified during investigations and monitoring, we follow disciplinary procedures, notify all employees, and incorporate these findings into our regulations and training programs.

Compliance Risk Management Framework

  • Code of Ethics

    • Code of Ethics
    • Compliance regulations
    • Practice Guidelines of the Code of Ethics

  • Prevent

    • Group training(online), regular/frequent CP training
    • CP communication system(Ask CP)
    • Survey on business ethics
    • Business ethics workshop

  • Detect

    • Investigation of reports
    • Self-correction system
    • Constant monitoring of marketing and promotion activities

  • Respond

    • Results analysis for investigation of reports, monitoring and self-correction system
    • Disciplinary action against results and reflection of them in regulations and education
Compliance Officer

SK bioscience appoints the head of the Office of Legal Affairs as the Compliance Officer to carry out compliance activities. The Compliance Officer is appointed for a term of three years and plays a key role in overseeing the company’s compliance work to strengthen the governance system, proactively preventing and managing legal risks.

Responsibilities of the Compliance Officer

SK bioscience has strengthened its compliance system by specifying the activities, rights, and duties of a compliance officer in the compliance guidelines. The Compliance Officer is responsible for operating compliance education/training programs and checking whether compliance guidelines are being followed. When necessary, the Compliance Officer may request employees to submit materials and seek advice from external experts, as well as make a statement to the Board in relation to compliance control. Beyond general compliance activities, the Compliance Officer actively works to enhance the company-wide compliance system through risk prevention activities, thereby contributing to the Office of Legal Affairs’ 2030 longterm vision of becoming a ‘Proactive & Business-oriented Legal Solution Provider’.

Responsibilities of the Compliance Officer

  • Reorganization of the Governance Structure

    • Establishment of the Board-level Management System

      Support for the establishment of the Board process and operation of committees

    • Establishment of an Operating System in accordance with Relevant Regulations and Laws

      Compliance with disclosure obligations and regulations under the Capital Markets Act, and prepare for ESG evaluation

  • Preemptive Risk Management

    • Establishment of a Companywide and Integrated Risk Management System

      Identification, evaluation, response, and inspection of risks

    • Minimization of Contractual Risk

      Contract review to minimize disputes and risks

  • Support for Domestic/Global Businesses and Projects

    • Domestic/global Businesses

      Monitoring of and response to regulations and policies for domestic marketing alliances

    • Projects

      Clarification of the scope of liability and indemnification under the C(D)MO and domestic distribution contracts