Paul McKenzie stepped down on Tuesday as chief executive and managing director of CSL, the $89 billion company announced.
"When the board sat down recently and looked at our business and where we need to go in the future, we, in discussion with Paul, recognised he didn't have the skills that we wanted for the future," chairman Brian McNamee told analysts.
"We discussed this question of him therefore retiring.
"We need new and broader skills to take us to improve performance commercially and also broaden our pipeline activities."
Former CSL senior executive Gordon Naylor, a non-executive director of the company, has been appointed interim CEO and managing director.
"Interim does not mean I'll be taking a back seat," Dr Naylor said.
"My experience at CSL means that I can hit the ground running and ensure we make significant progress."
He begins in the role on Wednesday.
Dr McNamee paid tribute to Dr McKenzie's contributions and commitment to CSL during the past seven years, including three as CEO.
"During his tenure, Paul guided CSL's global operations through the challenges of COVID-19, stabilised manufacturing and supply chains and increased plasma collection volumes beyond pre-pandemic levels," Dr McNamee said.
Dr McKenzie said the past three years had been challenging for the business but he was proud of its organisational improvements, continued investment in research and development, and a new vaccine facility in Melbourne.
His departure was announced a day before the company's half-year financial results to reduce confusion on Wednesday when they were released, Dr McNamee said.
CSL in October downgraded its 2025/26 earnings guidance amid falling US vaccination rates and reduced demand from China for the blood protein albumin, leading to a sharp sell-off in CSL shares.
Dr McNamee expressed his frustration and disappointment at the company's annual general meeting, adding that CSL's operations had become too complex for it to react decisively.
"I am a believer in simplification," he said on Tuesday.
"One of the issues that (Dr McKenzie) has had to deal with is that the business got too complex, and simplification, to me, is a key thing we're looking at."
CSL remains a strong organisation that generates strong cash flows as a business, with significant unmet medical needs in much of its portfolio, Dr McNamee said.
"We have opportunities in the next three to five years," he said.Â
The company's board will start its global search for a new chief executive that Dr McNamee described as "a northern hemisphere job with a significant Australian attribute".
Dr Naylor has a 33-year tenure at CSL, including as chief financial officer and president of CSL Seqirus, its flu vaccine division.
CSL shares dumped in the final minute of trading after the 4pm AEDT announcement, falling 5.0 per cent to $171.39 and representing a 36.6 per cent drop over the past 12 months.
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