Working Paper No. 1326

CEO Health and Corporate Governance

Published: March 25, 2020, revised April 2020Pages: 65Keywords: CEOs; Corporate Governance; Executives; Mental Health; Physical HealthJEL-codes: G34; I12; J24; J31

CEO Health and Corporate Governance Matti Keloharju, Samuli Knüpfer and Joacim Tåg


Boards hire and fire CEOs based on imperfect information. Using comprehensive data on 28 cohorts in Sweden, we analyze the role of a potentially important attribute—CEO health—in corporate governance. Boards hire CEOs who are healthier than other high-skill professionals, in particular in mental health. After hiring, CEOs’ health develops similarly to a control group of executives. Health predicts turnover, measured at appointment and during tenure. These results are consistent with boards appointing CEOs with health robust enough to withstand the pressures of the job, correcting mismatches occurring at the time of appointment, and responding expediently to health shocks.


Reference:

Keloharju, Matti, Samuli Knüpfer and Joacim Tåg (2020), "CEO Health and Corporate Governance". IFN Working Paper No. 1326. Stockholm: Research Institute of Industrial Economics.​

Joacim Tåg

Contact

Ph: +46 8 665 4524
joacim.tag@ifn.se

Matti Keloharju

Contact

Ph: +358 40 353 8043
matti.keloharju@aalto.fi

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