SK Group Abolishes Public Relations Center, Eyes Corporate Governance Reforms

Strategic Insights -

SK Group, the third-largest conglomerate in South Korea, has decided to abolish its public relations (PR) center in a move aimed at streamlining its corporate structure and improving governance. The PR center, which carried out advertisements to enhance the group's image using funds from SK Telecom, the group's cash cow, will be dissolved, and its functions will be taken over by the existing PR team of SK Corp. This decision comes as the group faces challenges to improve its corporate governance, including the resignation of its owner from the directorship of SK Telecom due to accounting fraud charges.

Key Takeaways:

  • SK Group will abolish its public relations center, marking a significant step in its corporate governance reforms.
  • The move is aimed at dissolving the existing group system and transitioning to a network of separate, independent affiliates.
  • The PR center, previously under the former group restructuring center, carried out advertisements using funds from SK Telecom.
  • The existing PR team of SK Corp. will take over the functions of the abolished PR center.
  • SK Group's chairman, Chey Tae-won, was found guilty of massive accounting fraud last year.
  • The group has promised to change its management from an owner-led system to a more independent and separate system.
  • Chey Tae-won's term as director of SK Corp. will expire next year.

Statistics:

  • SK Group is comprised of 59 affiliates.
  • The group's flagships are SK Corp. and SK Telecom.
  • SK Corp. is the largest oil refiner in South Korea.
  • Chey Tae-won, the chairman of SK Corp., was found guilty of massive accounting fraud in a previous case.
  • The group has faced challenges to improve its corporate governance, including a struggle with Sovereign Asset Management, a second-largest shareholder.

Sources:

  • Asia Pulse, London, 16 March
  • Yonhap news agency