In many countries around the world, various laws and regulations are in place to ensure that companies maintain healthy competition and carry out their duties as corporate citizens in the process of business performance. That makes it necessary for companies to preemptively manage legal risks to maintain their business activities in a stable way.
With various stakeholders requiring companies to do more for environmental, social, and governance (ESG) management, it is becoming more important for companies to keep their governance structure transparent and meet the social responsibilities in accordance with compliance policies.
Celebrating the “Law Day” in Korea on April 25, the newsroom team met with the members of the Compliance Team to learn more about SK hynix compliance policies.
Policies for Legitimacy…Prevention Is the Key
The Compliance Team monitors changes in relevant laws and regulations and the company’s business activities bound to such rules. The team also establishes work processes in accordance with the laws to ensure every employee of SK hynix, its affiliates, and business partners complies with the relevant laws. The team’s role also includes but is not limited to keeping the working-level employees updated when a relevant law is revised.
Prevention is the key. The ultimate goal of the corporate compliance is to prevent law violations by managing risks preemptively, rather than addressing the legal issues only after they appear. The significance of the Compliance Team lies in its responsibility to lay the foundation for “compliance management” by achieving this goal and contribute to the company’s “sustainable management”.
The team consists of three main parts: Fair Trade Part, Responsible Business Alliance (RBA)1 Part, and the Legal Tech Part.
First, the Fair Trade Part keeps track of legal risks in the business relations with stakeholders such as partner companies subject to the Fair Trade Act and Subcontracting Act, and establishes the process to prevent risks from emerging. For this, the part sets up guidelines on the trades with affiliates and subcontractors and provides training sessions. The part also provides legal advisory services on transactions with subcontractors and monitors if business activities are in line with the compliance policies.
Main responsibilities of the RBA Part include training working-level employees and business partners in the labor/human resources (HR) and safety, health, and environment (SHE) fields and conducting internal reviews to ensure that SK hynix complies with RBA standards as a member of the alliance. The part also responds to client requests for due diligence and data provision with regard to the ESG management, and manages risks related to ESG preemptively.
Lastly, the Legal Tech Part cooperates with the IT department to optimize the usability of the related systems such as the compliance system, legal affairs support system, and technology data management system. Also, the part is in charge of establishing the database with the documents collected as part of the compliance activities so that legal issues can be effectively addressed when they arise.
Project Leader (PL) Seol Kim of Compliance Team
“The laws are meant to guide companies to protect their members, establish a transparent governance structure and compete in a fair way with competitors and protect the weaker in all transactions. I think it’s time for corporate legal affairs teams to turn more proactive to respond faster to the needs of the stakeholders when it comes to compliance.”
Q. Compliance-related work requires a high level of expertise in laws and industry. What qualifications do you expect from job candidates?
PL Seol Kim: The ability to interpret laws and regulations related to fair trade or subcontracting and reflect the interpretation to the actual case is essential. For this reason, our team consists of lawyers.
Q. What motivated you to work for the Compliance Team, particularly the Fair Trade Part?
Technical Leader (TL) Ju Hyun Cha: This is my first job after law school. I was deeply interested in economic laws and wanted to build my career in this area. SK hynix has a department dedicated to compliance and I thought it was a great opportunity to deal with economic laws such as the Fair Trade Act.
TL Ju Youn Lee: These days, law firms are expanding the scope of their work to checking relevant laws and regulations in advance and providing consultations before legal risks emerge and develop from conventional legal field such as contract review and legal dispute resolution. I was mainly involved in compliance related to fair trade or personal information protection laws when I was with a law firm before joining SK hynix.
Q. What qualifications does a compliance job require?
TL Ju Youn Lee: While it’s important to understand and interpret relevant laws and regulations properly, it’s also critical to have deep understanding of the industry. For example, you would have to review not only the terms of the contract, but also the background and the potential impact of the contract.
Q. Why did you choose to work for the compliance team and particularly the RBA part?
TL Ki Sub Yoon:
I started my career at the Ethics Management team. With the growth of the company, meeting the ESG and RBA standards is becoming more important and I thought I could help create synergies by combining my experience at the Ethics Management team and the compliance work.
Q. When do you feel rewarded and proud as a compliance team member?
TL Won Kyun Lee: Our requests for relevant entities to share data with us as part of a due diligence we were conducting for RBA review were often rejected or avoided in the past. But now, it’s different. They are very cooperative, sharing data with us in advance and asking for advisory when needed as they better understand the compliance policies now. I feel rewarded when I can see this kind of change from the people we work with.
Q. What prompted you to choose to work for the Legal Tech Part?
TL Bong Kyoung Lee: As more legal-affairs works are done with the help of the IT these days, the company was looking for someone who can build and run the IT system to strengthen the compliance activities. I thought it would be an exciting work to help members of SK hynix to access the legal system more easily.
1Responsible Business Alliance (RBA): As a global coalition comprising of around 160 companies in the electrical and electronics industry including Dell, HP, IBM, and APPLE, the group is dedicated to corporate social responsibility in the global supply chain by auditing and managing member companies’ safety, health and environment (SHE), human rights, labor, ethics, operational transparency, etc. The organization stipulates corporate social responsibilities at the workplace through codes and requires business partners to comply with the codes. Member companies regularly evaluate whether their partner companies have achieved (operated) the codes at the highest standard through regular audits and share the results with other member companies. Since member companies reflect the audit results in purchase contracts, all member companies try to achieve the required level.
