A wave of generational shifts is blowing across Korea's mid-sized pharmaceutical and biotech corporations. As management succession among founding families continues, personnel and organizational changes are also following at the corporations.
According to the industry on the 13th, several executives in their 50s and older at Dongwha Pharm recently stepped down. Executive Director Lee Taek-gi, who led public relations, and Executive Vice President Lee In-deok, who oversaw the overseas institutional sector, among others mainly aged 50 and over, retired as of this month.
A company official said, "It is true that some left, including Executive Director Lee Taek-gi, but it is difficult to give specific answers."
The positions vacated by Executive Vice President Lee In-deok, Executive Director Lee Taek-gi, and others are currently empty, and internal employees expected a recruitment soon.
In the industry, the reshuffle was interpreted as a major organizational change under the leadership of fourth-generation scion and CEO Yoon In-ho, 41. Yoon, the eldest son of Dongwha Pharm Chairman Yoon Do-joon, 73, was promoted from executive vice president to president in Mar. He joined Dongwha Pharm's finance department in Aug. 2013 and rose to president and CEO in about 12 years after holding various positions. The company is currently run under a co-CEO structure with professional manager Yoo Jun-ha and Yoon In-ho serving as separate representatives.
An industry official, referring to the reorganization, said, "It seems CEO Yoon In-ho focused on replacing executives older than himself," and added, "The generational shift within the organization is likely to speed up."
◇ Owner takes full charge as sole CEO
In the past, during management succession among founding families, it was common to seek stability through a co-CEO system in which a professional manager and a member of the founding family jointly served as representatives. Recently, however, some corporations have shifted to a sole-CEO system led by the owner family.
In the case of IL-YANG PHARM, it had been operated under a joint system by CEO Kim Dong-yeon, 75, and CEO Chung Yu-seok, 49, but as of on the 17th of last month, it shifted to a sole system under CEO Chung following Kim's resignation.
CEO Chung is the grandson of the late Honorary Chairman Jung Hyung-sik, the founder, and the eldest son of Chairman Jung Do-eon, making him a third-generation owner. He joined IL-YANG PHARM in 2006 as a marketing Director. He later served as head of the overseas business and marketing division in 2012, executive vice president in 2018, and was promoted to president in 2023.
The company's change in management structure was a follow-up measure to sanctions by regulators. Earlier, the Securities and Futures Commission (SFC) said the accounting treatment at IL-YANG PHARM's local subsidiary in China violated accounting standards, recommended the dismissal of the CEO, and imposed a six-month suspension.
As a result, among the co-CEOs, former CEO Kim effectively stepped down, taking responsibility for the company's accounting violations. Born in 1950, former CEO Kim joined IL-YANG PHARM in 1976 as a researcher at the Central Research Institute and spent his entire career at IL-YANG PHARM, serving as CEO for 18 years as of this year and known in the pharmaceutical sector as a long-serving professional manager.
Boryung held a board meeting in Mar. and changed from a co-CEO system with Kim Jung-gyun and Jang Doo-hyun to a sole-CEO system under Kim Jung-gyun. Subsequently, professional manager Jang Doo-hyun was newly appointed in Sep. as CEO of HUGEL, a medical aesthetics corporations, moving his affiliation.
CEO Kim Jung-gyun is the grandson of Honorary Chairman Kim Seung-ho, founder of Boryung Pharm (now Boryung). He joined Boryung in 2014 and worked in the strategy planning team, production management team, as head of HR, and as head of corporate planning, before becoming CEO in 2022.
The company said of the shift to a sole-CEO system under Kim Jung-gyun, "It was a decision made in consideration of the need for accountable management to carry out Boryung's growth strategy quickly and effectively amid an uncertain business environment."
◇ Cha Bio Group fires the starting gun for a generational shift
Meanwhile, some have moved to fully accelerate the generational shift. Cha Hospital and Cha Bio Group in Sep. appointed second-generation heir Cha Won-tae, 45, former president of CHA University, as group vice chairman and chief sustainability officer (CSO) of CHA Biotech.
Vice Chairman Cha is the eldest son of Cha Kwang-yul, head of the global research institute of Cha Hospital and Cha Bio Group and the founder who built Cha Bio Group, and the grandson of the late Cha Kyung-seop, honorary chairman of CHA University and Cha Hospital. He previously began as an intern within the group and has undergone management training. He later served as chief operating officer of CHA Health Systems, which operates CHA Hollywood Presbyterian Medical Center in Los Angeles, chief strategy officer of Hollywood Presbyterian Medical Center, and then as president of CHA University.
Regarding the appointment, a group official said, "Vice Chairman Cha, who has undergone management training, is stepping to the forefront of management in earnest, so it can be seen as firing the starting gun for a generational shift."
Cha Bio Group said that going forward, Vice Chairman Cha will strengthen the group's ESG (environmental, social and governance) management framework, secure competitiveness among group affiliates, and take on the role of identifying future growth engines. Within the group are listed affiliates such as CHA Biotech, CMG Pharmaceutical, and CHA Vaccine, as well as CHA Healthcare, CHA Meditec, CHA Bio F&C, CHA Cares, Seoul CRO, and Solidus Investment.