Mental health is frequently in the news, mostly in the context of efforts to help those who find themselves suffering. In corporates, however, researchers have found that some effort is also expended on disposing of chief executives who may find themselves with mental health issues.

A study in Sweden looked at the health records of 25,000 individuals who served as chief executives to explore the role of health in corporate governance. Their findings were stark.

While CEOs do not appear to suffer from physical or mental health issues any more or less than an average member of the population—indeed, in some respects they may be healthier—those that are afflicted with health issues while in office may find themselves moved on fairly quickly.

The researchers, based at institutions in Sweden, Norway and Finland, concluded that even if poor health goes undetected at the time a new chief executive is hired, if they become unwell while in post they confront a bigger risk of parting company with the orgnisations they run.

“Albeit boards seem to screen the potential CEO candidates well, some CEOs will inevitably develop health problems during their tenure at a firm,” wrote the researchers. “Other things being equal, we would expect boards to be more inclined to dispose of CEOs who are mentally or physically less fit to run the firm.

“We find that poor health—in particular, poor mental health—is highly significantly associated with greater CEO turnover.

“Here both contemporaneous health and health at the time of appointment matter. Thus even if an individual’s poor health goes unnoticed by the board at the time of appointment, she continues to face a much greater turnover risk while on the job.

“This result is consistent with board correcting mismatches at the time of appointment.”

The researchers were able to examine a comprehensive data set with information on health, including hospitalisations, open care treatment and prescriptions.

Stark reality

The conclusions may come as a painful observation for those who have campaigned for greater understanding of mental health issues, but it appears to be the uncomfortable for some chief executives, at least in Sweden.

In UK there has been an intense focus on mental health in the past few years, which has seen figures such as Lloyds Bank CEO António Horta-Osório speak publicly about their own mental health as well as efforts they have made the issue in the workplace.

In recent years the Institute of Directors (IoD) has launched campaigns to promote the mental health of both employees and company directors. The institute published a survey in February last year revealing that more than half of 500 directors polled said they had suffered mental health concerns in part connected to work-life balance issues.

Edwin Morgan, then interim director general of the IoD, said: “For entrepreneurs and senior directors, life often revolves around work, and when a problem arises on the job, it can feel all-encompassing.

“With the success or failure of the organisation on their shoulders, some directors find it hard to prioritise their own well-being.”

‘Tangible frictions’

The researchers in Sweden also found a relationship between health issues and some corporate policy measures. They looked at four: acquisitions, plant openings, investment and sales growth. They found a significant statistical correlation, the strongest with acquisitions and plant openings: as CEO health worsens, so the number of acquisitions and plant openings fall.

“These results suggest that health-related corporate-governance has tangible frictions,” the researchers wrote, “at least for corporate policies requiring an active CEO role.”

In the end the researchers concluded that there appears to be no increased health risks associated with being a CEO that requires “substantial’ investment in “health-enhancing interventions”. Indeed, CEOs may indeed be healthier than other members of the population. But correlation between CEO turnover and poor health is strong.

“Whether this is a reasonable response to the demands of the job or a form of discrimination is an open question,” said the researchers.