Governance

Ethical Management

Ethical Management Principles

Code of Ethics and Ethical Management Guidelines

SK bioscience established principles of ethics under the belief that ‘transparency is the key prerequisite for sustainable management’. By adopting the Code of Ethics which considered various stakeholders, we prepared standards for judging the decisions and actions of employees in all management activities. Our Code of Ethics has provided consistency in principles to our employees based on SK Group’s management philosophy and business ethics culture.

SK bioscience also discloses detailed guidelines for action, stipulating the behavior standards of employees and our obligations to comply. All employees of SK bioscience have an obligation to comply with the Code of Ethics and Practice Guidelines of the Code of Ethics. We have been expanding the scope of application of the Code of Ethics by actively encouraging our stakeholders to understand and practice the Code of Ethics.

We have more employees with diverse backgrounds and work experiences as our business has grown rapidly in recent years. We felt the need to elaborate the Practice Guidelines of the Code of Ethics in order to provide clear and consistent judgment standards for all employees because our employees have various levels of awareness of business ethics. Subsequently, we began supplementing and revising the Practice Guidelines of the Code of Ethics, with the goal of completion within the first half of 2022. In addition, case-based FAQs will also be provided so that employees can more easily understand and use the practice guidelines.

Click to view the Code of Ethics

Click to view the Code of Ethics Practice Guidelines

<Key Principles of the Code of Ethics and Ethical Management Guidelines include:>

<Key Principles of the Code of Ethics and Ethical Management Guidelines include:>It indicates the main contents of the code of ethics and exemplary standards, and whether they include the relevant contents of our ethical guidelines.
Highlights of the Code of Ethics (Best Practices)	Included
Non-discrimination	Yes
Prohibition of officer or employee private gain when conducting company business	Yes
Prohibition of embezzlement and breach of trust of officers and employees	Yes
Prohibition of corruption of officers and employees	Yes
Prohibition of money laundering and insider trading by officers and employees	Yes
Prohibition of bribery and solicitation of officers and employees	Yes
Promotion of fair trade and fair competition (likewise, prohibition of acts that support monopoly or limit competition)	Yes
Compliance with nondisclosure of confidential information, including confidential and internal information of the company or its customers	Yes
Prohibition of unfair acts that use undisclosed internal information	Yes
Promotion of knowledge about the environment and workplace safety and health issues	Yes
Consistent responsibility to shareholders and customers	Yes
Responsibility to report illegal or unethical conduct	Yes
Protection of internal reports and whistleblowers in the event of illegal or unethical conduct	Yes

Implementation of Education Programs

GRI 205-2

SK bioscience regularly conducts ethics training for its employees. We enhance our employees’ ethical decision-making ability by raising awareness of the misuse of corporate credit card, sideline jobs, abuse of power, and hospitality/entertainment during the SK Group online training held once a year. Additionally, we conduct regular compliance training twice a year for sales/marketing divisions, and require new employees to complete compliance training. Furthermore, we strive to establish a compliance culture within the company by conducting compliance training from time to time as needed.

In 2020 and 2021, workshop discussions on business ethics was held at the company-wide level, and compliance training was also conducted for sales/marketing divisions. We plan to continue conducting ethics and compliance training and managing performances in the future.

<Ethics Compliance Training for Employees>

<Ethics Compliance Training for Employees>It indicates the types, targets, and frequency of education.
Category	Subject	Frequency
Business ethics training	All employees	Once a year
Business ethics workshop (discussion-based training)	All employees	Once a year
Compliance training	Sales/marketing divisions	Four times a year

Ethics Reporting System

GRI 102-17

GRI 205-3

In order to establish fair and transparent management and an ethical corporate culture, SK bioscience discloses the Code of Ethics, which provides the criteria for judging our employees’ decisions and actions. Besides, we operate an online reporting channel through which all stakeholders can freely receive business ethics consultations and report violations of the Code of Ethics and Practice Guidelines.

The content of the report and the identity of the informant are strictly protected. Through a meticulous investigation, the reported information is verified, and follow-up measures such as disciplinary action are implemented in accordance with regulations and procedures.

<What to Report>

<What to Report>It indicates the classification and target of ethical management reporting.
Category	Subject
Corruption and abuse of power in business relationships	Giving or receiving money/hospitality, personal requests, equity investment, unfair instructions, verbal abuse/assault, etc.
Lack of respect among employees	Verbal abuse, assault, sexual harassment, bullying, exclusion from work, personal errands, etc.
Inappropriate business practices	False report, performance manipulation, unethical sales practices, embezzlement, improper use of expenses and assets, information leakage, 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.
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.
Violation of the law	Violation of the Fair Trade Act and other laws, etc.

Through various channels, SK bioscience receives reports of violations of the Code of Ethics and Practice Guidelines of the Code of Ethics. The channels include the SK Business ethics website and the counseling&reporting link on the SK bioscience website, as well as e-mails, mails, phone calls, and personal visits to SK bioscience.

<Ethics Reporting Channels>

Report Site

Link to detail of Consultation Requests and Reports

<Report Processing>

SK bioscience takes appropriate disciplinary actions against employees who violate the Code of Ethics and Practice Guidelines of the Code of Ethics.

In 2021, the total number of reports received through the whistleblower system was seven. Excluding simple complaints, there were a total of two reports that provided detailed information and were investigated. As a result of the investigation, the involved employees were proved to be innocent, thus personnel measures related to the case were not taken. The whistleblower can inquire about the results via SK Group’s business ethics website.

Compliance Division and Structure

Compliance Officer

SK bioscience established compliance guidelines on October 29, 2020, and appointed Yang Jeongil, then head of the legal division, as a compliance officer. Following his resignation, the head of the legal division, Ji-hyeon Yoo was appointed as the compliance officer on December 1, 2021. The compliance officer oversees our compliance work to strengthen the governance system and proactively manages risks for three years, which is the term of the officer.

<Responsibilities of the Compliance Officer>

Compliance(CP) Team

SK bioscience has introduced and is operating a compliance program to take the lead in a fair and free competition. We appointed the head of the legal division as the Chief Compliance Officer to be in charge of planning/implementation/evaluation/supervision of the voluntary compliance program. Accordingly, the Chief Compliance Officer oversees the operation of the program, from managing business-related activities such as pharmaceutical CP activities to raising the level of all employees’ awareness of antitrust compliance.

Moreover, our CP Team is committed to business ethics and the avoidance of compliance violations. To be more specific, the team makes efforts to establish related systems, monitor and investigate reported matters, conduct training, and penalize violators, etc.

The importance of the internal audit function to check the internal system is growing as the business environment within SK bioscience changes, such as the recent rapid increase in the size of the company and the number of employees. As a result, we have established a plan to broaden the roles of the CP Team. In 2022, we will prepare audit regulations for the objectivity and independence of audits and secure the talent capable of conducting internal audits.

Compliance Program

SK bioscience has established and implemented standards and procedures in accordance with the Fair Trade Commission’s requirements for the implementation of the voluntary compliance program. The reporting process begins with the Chief Compliance Officer, who receives reports on operational status in order to evaluate effectiveness and improvement measures and then reports to the Audit Committee.

We have produced and distributed compliance-related company rules/manuals to provide continuous guidance to our employees. In addition, the detailed guidelines are constantly updated, and related training is also being conducted.

If a violation of the compliance regulations is detected, we provide feedback by, for example, taking corrective measures aligned with internal disciplinary procedures such as reward and punishment regulations. We have a counseling/reporting channel open for legal violations consultation and reporting. Moreover, we encourage whistleblowing by periodically informing all employees about the reporting channel and the whistleblower protection system.

<Compliance Risk Management System>

Internal Accounting Control System(IACS)

SK bioscience operates the IACS in accordance with the Act on External Audit. Our IACS auditor certification level was raised from review to audit following the IPO in 2021. By thoroughly reviewing the existing system, we upgraded our IACS to reinforce transparency in corporate accounting and management through effective internal control activities.

SK bioscience operates the IACS to prepare and disclose reliable accounting information, not to merely maintain a system to comply with legal requirements. To this end, we have established related regulations and guidelines and assigned our IACS Part to perform walkthroughs and tests of controls. In this manner, we assess the operational status and check for abnormalities in all internal controls. Thus, our approval processes of major sales revenue, production, financing, and accounting, which affect the financial statements are kept in check. Also, we effectively respond to external factors that may affect our business, such as changes in accounting standards and laws.

These internal control activities are verified annually by a third-party external auditor(accounting firm). Meanwhile, the CEO reports relevant matters to the annual general meetings, the Board, and the Audit Committee for each business year. We make efforts to strengthen internal control and improve awareness at the company level by conducting IACS training for employees and the Audit Committee.