The Case for Making Staff Mental Health a CEO Performance Indicator

Should CEO pay ever be influenced by staffs' mental wellbeing? At least one prominent political personality in Australia thinks it should be, and he's won the backing of the country's chief lobby group for business leaders.

gettyimages-498805260-compressor-1Mental illness affected at least one-in-five Australians in the past year, while various studies point to a similar rate of suffering in the U.S.

Anxiety disorders are regularly found to the be the most commonly-reported form of mental illness in many countries, followed by depression and substance abuse problems. Companies tend to deal with these issues in human resources departments, and it’s hard to find a company that explicitly ties staff well-being with CEO remuneration.

“Employee mental well-being should be an annual key performance indicator of private-sector executives and government department heads.”

The issue of mental illness and corporate risk was thrust into the spotlight last year, when a young co-pilot for Lufthansa’s low-cost airline Germanwings intentionally crashed a passenger jet into the French Alps, killing himself and 149 others.

CEO remuneration should still be based on traditional measures of performance, such as profits and share-price movements, according to Jeff Kennett, a former premier of Australia’s Victoria state. But Kennett said employee mental well-being should also be an annual key performance indicator of private-sector executives and government department heads.

Kennett, who is chairman of mental health advocacy group beyondblue, formally broached the idea to CEOs and other senior executives today at a forum in Melbourne organized by lobby group Business Council of Australia (BCA).

“If some of these people think this is all sort of rubbish and over the top, well, tie their bonus to it, tie their salary to it,” Kennett told the Australian newspaper ahead of his speech. ” Let them understand that this is a major contributor to the effectiveness of their administration.”

The BCA said it was “interested and passionate” about Kennett’s idea for economic reasons. “We do take these things very seriously because they result in unplanned absenteeism, they cost business money,” BCA CEO Jennifer Westacott told the newspaper. ” They’re not just feel-good things.”

Westacott said some businesses already have CEO performance indicators that broadly address staff retention. though she and others have acknowledged that more could be done.

“To date, companies have focused on physical health much more than they have on mental health,” John A. Quelch, a professor at the Harvard Business School said in the wake of the Germanwings incident.

“Most physical conditions are visible, either to the naked eye or an X-ray. Mental health conditions aren’t so easily identifiable.”


  • Get the CEO Briefing

    Sign up today to get weekly access to the latest issues affecting CEOs in every industry
  • upcoming events


    Strategic Planning Workshop

    1:00 - 5:00 pm

    We are in a period of rapid change. Customer needs, technologies, competitors and internal capabilities require companies to review and update their strategies for the new realities. In this workshop, strategy experts Steve Rutan and Denise Harrison will show you a systematic approach to strategic planning to help you refine or redefine your business strategy and approach including:

    • Learn what you need to know to develop an effective strategic plan. Put the right players on the strategic planning team.
    • Develop strategies that leverage your company’s unique position in the marketplace. Lift your management team beyond “business as usual” thought processes and activities.
    • Translate your strategies into action. Achieve your vision for success and generate superior financial results.
    • Identify exactly what you need to do now to position your company for future success.

    To sign up, select this option in your registration form. Additional fee of $695 will be added to your total.

    New York, NY: ​​​Chief Executive's Corporate Citizenship Awards 2017

    Women in Leadership Seminar and Peer Discussion

    2:00 - 5:00 pm

    Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations. 

    Limited space available.

    To sign up, select this option in your registration form. Additional fee of $495 will be added to your total.

    Golf Outing

    10:30 - 5:00 pm
    General’s Retreat at Hermitage Golf Course
    Sponsored by UBS

    General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.

    The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.

    To sign up, select this option in your registration form. Additional fee of $295 will be added to your total.