A Healthy Approach to CEO Illness

How should companies cope with a leader’s health crisis?

Smith Thomas was a highly successful CEO whose firm was a leader in its industry. He was a robust man, supremely self-confident, gregarious, passionate about his work, devoted to his family. A college athlete, he remained faithful to a strict workout and nutritional regimen. Seeing himself as invulnerable, he rarely visited his physician and ignored urinary symptoms when they arose.

“Although there was a succession plan in place, Thomas would not step down, even temporarily. The board held out hope he would quickly recover and resume his position. In the meantime, the company was in a state of paralysis and facing additional losses.”

By the time the diagnosis of bladder cancer was made, the cancer had spread and surgery and chemotherapy were necessary. While Thomas worked whenever possible, he needed to be away for days at a time for treatment. At the office, he was often preoccupied with the physical and emotional toll the illness was having on him and his family. He had little sense how his condition was affecting his business, his employees, and the company’s productivity. His management team would fill in for him whenever he was absent or  too ill to be at work. The board of directors was reassured by Smith that he was able to function and perform all necessary duties. This reassurance flew in the face of the company’s declining revenues.

Loyal employees felt in an impossible position, as it became apparent that the company was suffering. Gradually, it became more difficult for them to cover for Smith’s lapses. His team and the board felt conflicted as well. They  tried to overlook Smith’s forgetfulness, lateness, becoming ill on the job, and his lack of attention to detail.

Although there was a succession plan in place, Thomas would not step down, even temporarily. The board held out hope he would quickly recover and resume his position. In the meantime, the company was in a state of paralysis and facing additional losses.


Illness 1.inddRecent literature on board effectiveness and board functioning pay scant attention to the problem. Yet in both private and public companies, it is a nearly ubiquitous concern. Although many companies have avowed contingency plans, they often prove to be more in “word than deed”,  as Steve Jobs’ example shows. Waiting until a crisis hits and having to make decisions in a highly charged, emotional atmosphere is obviously far from ideal; and yet, that is exactly what often occurs.

The paucity of literature on the subject of CEO illness mirrors the fantasy of invincibility we attribute to our CEOs. We  like to think of them as forces of nature, able to overcome all obstacles, super humans able to conquer any adversity. We prefer to see them the way they often see themselves. We rarely anticipate or prepare for any key executive becoming ill, let alone the CEO. And even if illness is evident, it may well create discomfort or be ignored for a variety of reasons  by those close to the situation. Directors, as well as senior management, may be deeply affected by the illness they witness in their friend, colleague or boss. Not infrequently, their response may be guided by concerns about their own mortality, concerns triggered by changes they observe as the illness progresses.

The consequences of avoiding the illness may be felt throughout the company. Issues such as whether to disclose the illness, succession planning, the effect on public perception and valuation of the company and ethical and legal responsibility to employees and shareholders must be addressed. If a leadership and or succession plan is not put in place in a timely manner, it can lead to a great deal of wealth destruction. Whether the illness is temporary, chronic, life threatening, medical, psychiatric, or related to substance abuse, companies must find ways to deal with the consequences. The Board must concern itself with the sustainability of the company at a time of great personal distress, when the CEO’s wishes may be markedly different  from the shareholder’s interests.


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