Mental health issues among those in top management are often concealed due to stigma and concerns about professional reputation, which often results in undertreatment. Research from the Indiana University Kelley School of Business used a new means of assessment to gain insight into depression among chief executives.
The study applies artificial intelligence to analyze vocal acoustic features - subtle markers that are imperceptible to the human ear - from CEOs' speech. By leveraging machine learning models trained on clinically validated depression indicators, researchers examined more than 14,600 earnings call recordings from S&P 500 firms from 2010 to 2021. The findings reveal that in over 9,500 instances, CEOs exhibited vocal markers consistent with depression.
Nargess Golshan.
Credit: Photo by Josh Anderson, IU Kelley School of Business"Our study provides an initial examination of CEO depression, something that often remains hidden due to the high-pressure nature of the role these people play at their companies," said Nargess Golshan, assistant professor of accounting at the Kelley School. "Given their pivotal role as decision-makers, CEOs' emotional states can significantly impact their careers, firms and the broader economy. The demanding nature of their job, with long hours, high stress and crucial decision making, increases their risk of depression."
The paper, "Silent Suffering: Using Machine Learning to Measure CEO Depression," appears in the Journal of Accounting Research.
Golshan and her co-author Mark Cheng, a doctoral candidate at the University of Kentucky, explored the prevalence and severity of CEO depression and its links to job-related stressors. Their findings reveal that greater firm risk correlates with higher depression levels, while higher job demands are associated with lower depression rates. The study also found that female and older CEOs were less likely to show signs of depression.
Previous research has found that the same brain regions that involve depression are also associated with decision making. People who are depressed are more sensitive to losses and negative feedback, while being less sensitive to positive feedback and rewards.
Golshan and her co-author also investigated how depression is associated with CEOs' career outcomes. While they found no evidence that CEO depression was associated with CEO turnover, they did find that turnover-performance sensitivity was higher among depressed CEOs.
The researchers also examined how CEO depression is related to compensation and incentives. Their findings suggest that CEOs with higher levels of depression tend to receive larger compensation packages, and more of their compensation is linked to performance. Collectively, these findings suggest that CEOs with depression have a heightened responsiveness to negative feedback and a diminished sensitivity to positive feedback.
Golshan and Cheng also examined the relationship between CEO depression and firm performance, which included current and future returns on assets, operating cash flows, sales growth, and stock returns. They found no evidence that CEO depression explains firm performance either in the short or long term.
"Considering the widespread nature of depression among executives, additional studies are needed to understand contributing factors, how depression affects business decisions, and strategies for managing depression in leadership roles," Golshan said.
She said her model should not be seen as a diagnostic tool but as "a means of shedding light on an important issue that has long been hidden in executive circles."
