South Korea’s chipmaker SK Hynix Inc. said on Thursday that it has adopted a representative outside director system to improve overall management transparency. A representative outside director will be responsible for convening and presiding over a board of directors meeting, integrating directors’ opinions, and providing various support for more efficient performance.

An unnamed official from SK Hynix said that a representative outside director position is mostly arranged by financial institutions in accordance to domestic law but it has exceptionally created the role as a manufacturing company to boost overall transparency.

SK Hynix expects the new system will lead outside directors to carry out more active discussions during board meetings and allow diverse opinions of the board and investors to be reflected in management given that the representative director will be able to demand the company to report major business issues to the board group.

The representative outside director will also be given evaluation rights of board management, in line with the company’s efforts to enhance independence of the board and its monitoring and containing role.

Choi Jong-won, professor of public administration at Seoul National University who has been serving as a non-executive director of SK Hynix since 2014, has been appointed as the first representative outside director. His term will end in 2019.

SK Hynix, meanwhile, also said that it has created a sustainable management committee within the board to create more social value, which has been under emphasis by SK Group Chairman Chey Tae-won. The committee will discuss and review strategies so that SK Hynix is able to promote more sustainable management and improve expertise and transparency in decision making process.

The committee will also take on the role of reviewing diverse social-related issues such as safety, hygiene, and environment, and also the result of the company’s social value evaluation. It will also be responsible of issuing the company’s sustainability management report.

By Lee Dong-in and Lee Eun-joo

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]