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Governance

Creating Future Value through Transparent Management

Activities

Code

SK Networks developed in 2007 a code of ethics modeled from SKMS (SK Management System) epitomizing SK Group’s management philosophy and has continued to update it ever since. The code of ethics contains provisions governing good practices and decisions to be upheld by SK Networks people in terms of customer relations, basic employee ethics, accountability to shareholders, relations with business partners, and roles to play in favor of the society at large. In addition, SK network has rolled out a guideline for ethical practices to ensure that the code of ethics is correctly understood and complied with as intended. The guideline for ethical practices spells out practices to be upheld by SK Networks people in terms of anti-corruption, mutual respect, protection of corporate and customer data, avoidance of conflict of interest, arm’s-length transaction, safety/environment/health responsibilities, obligations to report irregularities and protect whistleblowers among others In particular, the guideline contains a series of provisions to monitor and eliminate non-compliance of anti-corruption laws including the Improper Solicitation and Graft Act (Anti-graft Act in short). The code of ethics and the guideline for ethical practices are shared with not only SK Networks people but also business partners, with ethical practice training programs provided and compliance agreements from them required. Furthermore, SK Networks had its anti-corruption management system certified (ISO 37001) in December, 2022 to promote ethical compliance, vowing to bolster up ethical practices ever more.

Compliance

Ethical Management Council

Since 2018, SK Networks has operated an ethical management council chaired by its CEO to build a system to ensure effective implementation of ethical business practices between the head office and subsidiaries and stimulate compliance with such practices. Working-level employees of each company in charge of auditing serve as ethics commissioners in the council and the working-level ethical management council is convened in each quarter to jointly plan and execute ethical training programs and workshops and perform a variety of activities, establishing a code of ethics per company, assisting with audit processes, investigating ethical violation cases, and developing the capabilities of staff members in charge of ethical compliance. The Ethical Management Working-Level Council convened in Q1, 2023 to announce the Ethical Management Working-Level Council operation plan, plan major ethical management initiatives and share performance data across subsidiaries in Q2, organize lectures on internal accounting control system by independent third party experts in Q3, and share highlights in ’23 ethical management practices. SK Networks will continue to leverage the ethical management council as a platform on which subsidiaries will enhance their own ethical management functions.

Ethical Management Reporting Channels

To monitor and manage our status of ethical management, SK Networks operates channels through which all stakeholders can report ethical misconduct. The reports received through these channels are investigated by the Internal Audit Team and the ethical management teams of each subsidiary and are transparently and systematically handled.

Ethical Management Reporting Channels

  • Web

    http://ethics.sk.co.kr

  • Address

    SK Networks Internal Audit Team, 85, Cheonggyecheon-ro, Jongno-gu, Seoul, 03190, Republic of Korea

To submit questions on product quality and services

Go to website

Self-Regulatory Examination System

SK Networks is conducting an annual in-house examination to enhance autonomy in practicing ethical management. A checklist has been created for ethical risks covering a range of areas, including HR management, cost management, purchasing/business partner management, sales/receivables management, investment management system, inventory management, and unusual risk management. The checklist is designed to assess and evaluate risks specific to each business area.

Consensus

Ethics Education

  • Ethics Education Policy

    SK Networks provides ethics education annually to its people including contractors and part- timers, aiming to ensure that all of them attend and finish the ethics education programs. A separate ethics education program has been available for management leaders and board members since September 2021, with another ethics education program intended for business partners rolled out from 2022 to boost awareness of ethical management practices. The ethics education programs cover major ethical management issues in SK Networks, including anti-corruption, office bullying, and work ethics. We also survey the ethics education program takers on the effectiveness, difficulty and logistics of the education programs to inform our efforts to improve the programs and contents of feedback from SKN people. SK Networks also plan to upgrade the ethics education programs for management leaders, board members and business partners annually in quantitative/qualitative terms in line with the rapidly changing business landscape both at home and abroad.

    Ethics Training History

    이 표는 윤리경영 교육 시행 성과를 제공하며 구분, 단위, 2019, 2020, 2021, 2022로 구성되어 있습니다.
    Category Unit 2019 2020 2021 2022 2023
    SK Networks, subsidiaries,
    and second-tier subsidiaries*
    No. of employees completed training** person 4,635 4,922 4,866 4,913 4,862
    Percentage of employees completed training % 98.4 97.8 98.5 99.2 99.4
    Partner companies*** Implementation Y/N N N N Y Y
    No. of partner companies completed training number 32 19

    * From 2019 to 2021, ethics training has been implemented in six companies (SK Networks (incl. Walkerhill), SK Networks service, SK Magic, SK Magic service, SK Rent-a-car, SK Rent-a-car service). The training was expanded to eight companies (the existing six companies + MINTIT and Cartini starting in 2022.

    ** Independent directors and non-regular employees were included from 2022.

    *** Business partners in direct transactions with SK Networks headquarters have been subject to a pilot ethics training program since 2022.

  • Ethics Practice Survey

    SK Networks conducts an Ethics Practice Survey for employees at the headquarters and its subsidiaries to assess compliance with the Code of Ethics and the level of ethical practice culture. Ethical management for employees is supported by handling critical implications from survey results, including mutual ethics among employees, inspection of SV-degrading elements, and continuous improvement of the ethical management practice system.

    Ethics Practice Survey History

    이 표는 윤리경영 교육 시행 성과를 제공하며 구분, 단위, 2019, 2020, 2021, 2022로 구성되어 있습니다.
    Category Unit 2019 2020 2021 2022 2023
    SK Networks, subsidiaries,
    and second-tier subsidiaries*
    No. of participating employees person 3,705 3,537 4,125 3,985 3,963
    Percentage of participating employees % 76.0 68.8 82.1 79.7 81.8

    * From 2019 to 2021, the Ethics Practice Survey has been implemented in six companies (SK Networks (incl. Walkerhill), SK Networks service, SK Magic, SK Magic service, SK Rent-a-car, SK Rent-a-car service). The Survey was expanded to eight companies (the existing six companies + MINTIT and Cartini starting in 2022.

  • Ethics Management Practice Pledge

    On the first business day of each year, all employees are encouraged to participate in the Ethics Practice Pledge. Along with the employees’ voluntary actions, we aim to enhance awareness of ethical management and establish a transparent corporate culture.

  • Ethics Practice Workshop

    Each year, SK Networks holds an Ethics Practice Workshop for all employees to elevate the level of their ethical management. During the Ethics Practice Workshop, participants watch videos or have discussions after reviewing pre-distributed materials related to ethical issues such as workplace bullying and conflict of interest at work, followed by sharing areas of improvement for practicing ethical management. In addition, organizations are selected and awarded the Ethics Management Workshop Excellence to internalize the ethical practice culture in each company, including subsidiaries.

    Ethics Practice Workshop History

    이 표는 윤리경영 교육 시행 성과를 제공하며 구분, 단위, 2019, 2020, 2021, 2022로 구성되어 있습니다.
    Category Unit 2019 2020 2021 2022 2023
    SK Networks, subsidiaries,
    and second-tier subsidiaries*
    No. of participating organizations number 414 393 549 419 393
    Percentage of participating organizations % 95 98 98 98 99.8

    * From 2019 to 2021, the Ethics Practice Survey has been implemented in six companies (SK Networks (incl. Walkerhill), SK Networks service, SK Magic, SK Magic service, SK Rent-a-car, SK Rent-a-car service). The Survey was expanded to eight companies (the existing six companies + MINTIT and Cartini starting in 2022.

Internal Audit

SK Networks conducts internal audits comprising routine audits, compliance checks, voluntary inspections, and investigations into ethical violations. To conduct its routine audit, SK Networks annually develops and evaluates a risk pool encompassing all of its business sites, subsidiaries and supporting organizations at home and abroad. This process reflects measurement and diagnosis results from SK Group and third-party institutions, risk check findings conducted through the voluntary inspection system and ethical practice surveys. Subsequently, an annual routine audit plan is developed for businesses and organizations identified as having high risks, with audit targets being finalized upon reporting to and approval by the Audit Committee. Furthermore, beyond mere audit execution, we systematically monitor compliance with recommendations and regularly report our findings to the Audit Committee to ensure adherence to applicable guidelines. Throughout the routine audit, we assess and enhance the effectiveness of governance structure, risk management, and control processes to assist the Company in meeting its business targets. Additionally, we inspect unethical issues as they arise.

The voluntary inspection system was established in 2011 with the aim of creating risk inspection manuals for each business area and conducting annual inspection of all SK Networks’ businesses and supporting organizations. Updated annually, these manuals are configured to assess and evaluate risks specific to each business area, including HR management, cost management, procurement/business partner management, revenue/credit management, investment management system, inventory management, extraordinary risk management. The scope of the inspection encompasses not only financial risks in each area but also scenarios that may be linked to unethical issues. These include situations such as solicitation of employment, unethical issues that could arise from businesses or positions competing with the Company, moral hazards related to the abuse or misuse of the Company properties by executives or employees, self-approval of expenditures by individuals with authority, illegal fund expenditures, and violation of procurement policy. High-risk items identified during the voluntary inspection process are directly examined by the Audit Office, which also verifies the adequacy of the voluntary inspection results and evidence provided by all businesses and supporting organizations.

SK Networks, along with all its subsidiaries, operate a range of ethical reporting channels both online and offline, including website, face-to-face counseling, and mailing services. Counseling requests and informant reports are managed with transparency and fairness in accordance with established reporting procedures. Customer complaints regarding services are directed to the relevant business units, while all other informant reports, including unethical issues, are directly investigated by the Audit Office. *Reports concerning subsidiaries are investigated in cooperation with the applicable subsidiary.

SK Networks conducts internal audits of all domestic and international business sites and subsidiaries, regularly reporting audit findings to the Audit Committee. Depending on the inspection results, opportunities for improvement are integrated into management activities, and corrective actions are promptly taken upon discovery of violations. In addition, comprehensive response strategies are developed and implemented in consultation with relevant departments as necessary. In 2023, violations of internal control guidelines were identified in areas such as information protection (document security) and inappropriate business handling, leading to corrective actions and process improvement. The Audit Committee also received reports on findings and results of corrective actions for each quarter. At the same time, violation findings and action results are communicated enterprise-wide and incorporated into internal ethical management program materials including ethics education and ethical practice workshop to prevent the recurrence of identical issues.

Overview of Internal Audits

Category 2021 2022 2023
Routine audit / Compliance Check Voluntary Inspection Ethical Violation Report Investigation Routine audit / Compliance Check Voluntary Inspection Ethical Violation Report Investigation Routine audit / Compliance Check Voluntary Inspection Ethical Violation Report Investigation
SK Networks O 6 O 14 O 18
ICT Marketing O O O O O
Speedmate O O O
Global Trading O O O
Global Investment O O O O
Staff O O O O O
Walkerhill O O O O
SK Magic O O 23 O 27 O 16
SK Rent-a-car O O 26 O 13 O 24
SK Networks Service O 1 O O 1 O O 3
MINTIT N/A - O -
Cartini N/A - O O 1
Total 56 55 62

※ The number of report investigations does not include customer complaints regarding services, which are forwarded to the relevant business organizations.

※ MINTIT and Cartini were incorporated in October, 2021 and classified as ‘subsidiaries spun off less than a year ago’ during the voluntary inspection in July, 2022. Therefore, they were excluded from the scope of the inspection at that time and included in the scope starting from 2023.

※ Over the past three years, all business sites and subsidiaries underwent one or more internal audits (routine audits, compliance checks, voluntary inspections, ethical violation report investigation, etc.), as these audits are required to be conducted at least once every three years.

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