Bloomington Leader

Mental health challenges in top management roles are often overlooked due to stigma and concerns about professional reputation, leading to insufficient treatment. A study from the Indiana University Kelley School of Business has employed a novel method to explore depression among chief executives.

The research utilizes artificial intelligence to assess vocal acoustic features—subtle indicators not detectable by the human ear—in CEOs' speech. Using machine learning models trained on clinically validated depression markers, researchers analyzed over 14,600 earnings call recordings from S&P 500 companies between 2010 and 2021. The results indicate that in more than 9,500 cases, CEOs showed vocal signs consistent with depression.

"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 titled “Silent Suffering: Using Machine Learning to Measure CEO Depression” is published in the Journal of Accounting Research.

Golshan and her co-author Mark Cheng, a doctoral candidate at the University of Kentucky, examined the prevalence and severity of CEO depression and its association with job-related stressors. Their findings show that greater firm risk correlates with higher levels of depression while higher job demands are linked to lower rates. The study also found that female and older CEOs were less likely to exhibit signs of depression.

Previous studies have shown that brain regions involved in depression are also linked to decision-making processes. Depressed individuals tend to be more sensitive to losses and negative feedback while being less responsive to positive feedback and rewards.

Golshan and Cheng further explored how CEO depression affects career outcomes. They found no evidence linking CEO depression with turnover but noted increased turnover-performance sensitivity among depressed CEOs.

The research also looked into how CEO depression relates to compensation and incentives. Findings suggest that CEOs experiencing higher levels of depression tend to receive larger compensation packages with more performance-based incentives. These results imply a heightened responsiveness among depressed CEOs towards negative feedback coupled with reduced sensitivity towards positive feedback.

Additionally, Golshan and Cheng investigated the relationship between CEO depression and firm performance metrics such as returns on assets, operating cash flows, sales growth, and stock returns but found no evidence suggesting an impact either 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 stated.

She emphasized that her model should not be considered a diagnostic tool but rather "a means of shedding light on an important issue that has long been hidden in executive circles."