Yuhan Corporation, the leading South Korean pharmaceutical company, is embroiled in internal strife ahead of its regular general shareholders’ meeting on March 15. The controversy stems from the company’s plan to amend its articles of incorporation to create new positions for a chairman and vice chairman, a move that has sparked opposition from some employees. They argue that “the current management is trying to privatize the company through the new titles,” and have even staged protests in front of the headquarters using trucks. The company counters that “the creation of the chairman and vice chairman positions is merely a measure in response to the company’s growth, and there are no plans to appoint specific people.”
New Yi-ling, the only direct descendant of Dr. New Il-han, the late founder of Yuhan Corporation, and a board member of the Yuhan Foundation residing in the United States, expressed concerns on March 13. “It seems like Yuhan Corporation is drifting away from my grandfather’s founding principles,” she said. “It’s regrettable that the company, once a shining example of good corporate governance, is losing the trust of its employees.”
New has recently returned to South Korea to attend the shareholders’ meeting. What is happening at Yuhan Corporation, once regarded as the most respected company in South Korea due to Dr. New’s contributions to society and the pioneering introduction of a professional management system?
In Yuhan Corporation’s history since its establishment in 1926, only Dr. New and his close associate, advisor Yeon Man-hee, have held the position of chairman, with Yeon stepping down 28 years ago in 1996. The chairman and vice chairman positions were never specified in the articles of incorporation before. Employees opposing the amendment argue that the current chairman of the board, Lee Jung-hee, is creating these positions to become chairman. Lee, who became president of Yuhan Corporation in 2015 and successfully served for six years before taking on the role of chairman of the board, contrasts with previous presidents who all retired after their terms.
Yuhan Corporation explains the restructuring as a move to “flexibilize ranks in pursuit of becoming a global pharmaceutical company.” A company official said, “With the company’s quantitative and qualitative growth, we deemed it necessary to have an organizational structure that fits the future scale of the company,” adding, “There are absolutely no plans to appoint specific individuals, and the general shareholders’ meeting will only revise the organizational structure without planning to appoint a chairman, leaving the position vacant until a suitable candidate emerges.”
Director New questioned the company’s stance, asking, “Why create a position only to leave it vacant?” and argued, “The creation of the chairman position contradicts my grandfather’s principle that ‘a company belongs to society and its employees.’” Employees opposing the company’s policy have been staging truck protests in front of Yuhan Corporation’s headquarters since March 11. The truck was funded through anonymous donations from employees, with about 300 employees, or one-sixth of the entire staff, reportedly contributing. “The current structure is already excessive for a company with less than 2 trillion won in sales, having both a chairman and president, six vice presidents, and dozens of executives,” said one employee.
