Events

Prof. M.K. Chin
Associate Professor of Management
Kelley School of Business
Indiana University

Using data on psychiatric diagnoses of CEOs in Finland, we examine a) whether CEOs’ substance use disorders reduce firm performance and increase the likelihood of CEO turnover and b) whether governance practices mitigate such impacts. Our data on CEOs’ psychiatric diagnoses is unique in its details as it is obtained from the official nation-wide healthcare register, containing CEOs all-life-time clinical diagnoses for substance use disorder and for other mental disorders. Our findings offer support for our hypotheses on the direct effects of CEOs’ substance abuse as well as the interaction effects of having family board members and external monitors. Our study contributes to the strategic leadership and corporate governance literatures by introducing a novel construct—CEO’s mental health and thereby expanding their theoretical scopes.