What happens when leaders become sick? 4 thoughts

The COVID-19 pandemic has left organizations and governments without leaders as illness has forced some to take extended time off. Forbes contributor Adi Gaskell sought to answer in an April 7 article how these absences affect the leaders' institutions.

Four thoughts: 

1. Research published in March in The Journal of the American Finance Association took a look at situations where leaders spent prolonged periods of time in the hospital and how their absence affected financial performance. The study, which examined 13,000 Danish small and mid-size companies from 1996-2012, found if their CEO was hospitalized for five to seven days, a given business' profitability fell by 7 percent in that year. Performance grew worse if the hospitalization lasted longer.

2. The phenomenon recorded by the researchers was only found to be linked to CEOs and not senior managers. When senior managers were hospitalized, it had about half as big an impact compared to CEOs.

3. A different 2019 working paper from researchers with the Boston-based Harvard Business School and England-based Lancaster and Bristol Universities suggested that if CEOs of hospitals in the National Health Service were replaced, little change in performance occurred. The researchers said the political nature of the NHS and bureaucracy could be possible reasons this was observed.

4. The research, while not directly looking at what would happen if a hospital CEO was out due to sickness, could "provide a degree of comfort that should leaders across our health systems get stricken down by the virus, the response of those hospitals may not be excessively affected," Mr. Gaskell wrote.

To read Mr. Gaskell's article, click here.

 

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