SK Chairman Chey Tae-won attended the Davos Forum’s official session and stressed, "Let’s maximize the value of stakeholders by upgrading the measurement of social values."
Chairman Chey attended a session held at the Davos Congress Center in Switzerland on Jan. 23 (local time) under the theme of "Stakeholder Capitalism in the Asian Century," and said, "It has become an obligation, not an option, to change the goals and systems of corporate management from shareholders to stakeholders."
Stakeholder capitalism is the pursuit of the public interest of stakeholders, including customers, employees, suppliers, communities and governments, not just shareholders.
"As we measure a company’s financial performance through financial statements, we should measure social values and develop social performance through them in the future," Chey said. "In particular, we need to secure objective and reliable measurement techniques to grow social values in the right direction."
After recalling the fact that he proposed during the 2013 Davos Forum for providing incentives to companies that created social value and encouraging them to improve social problems and participate," Chey introduced various methods, achievements and implications that SK attempted over the next seven years.
Under the belief that it is necessary to properly measure social values for incentive payments, SK has measured social values for social enterprises in 2014 and SK related companies since 2018.
In addition, it has formed the Value Balancing Alliance (VBA), a non-profit corporation, with the Organization for Economic Cooperation and Development (OECD), the World Bank, the world's four largest accounting firms and global companies, to jointly cooperate in developing standardized measurement models that are internationally accepted.
SK has implemented social progress credit (SPC) program that measures social value generated by social enterprises and provides incentives in proportion. The implementation showed that the pace of growth in social values generated by companies that received incentives was about 20 percent faster than the pace of sales growth.
In addition, SK is trying to make an essential change in corporate management by introducing Double Bottom Line management and innovating its business model to pursue both social and economic values at the same time.
“As SK members and various stakeholders share and join in pursuing social values, there are positive changes that expand the scope and size of solving social problems, but there are still many challenges to overcome," Chey said.
“To secure objectivity and reliability in measuring social values, more data must be secured,” he said, stressing that this requires more companies and stakeholders to join in creating and measuring social values.
Chey also suggested ways to enhance social values by utilizing high-tech technologies. "By using big data and AI, we can solve more social problems by understanding each individual’s social problems more closely and providing optimized services to individuals," said Chairman Chey.
"Investors can also contribute to solving social problems as they can encourage investment by accurately measuring and assessing the social values of investment companies," he added.
Chairman Chey’s suggestion drew keen attention in panel discussions as it was highlighted as a new method to build "capitalism for interested parties," the theme of the Davos Forum.
It was the second time that Chey attended the Davos Forum as an official panel member as the forum invited him as a manager who seeks and practices sustainable growth measures.