Mandatory Physicals for CEOs

CEO

Before buying a new car, the savvy consumer gives it a thorough inspection. Should the same be done by boards before hiring a new CEO?

When Oscar Munoz suffered a heart attack one month after being hired as the CEO of Chicago-based United Airlines last fall, subsequently being put on medical leave and undergoing heart transplant surgery in January, this question became more germane.

When a CEO is required to undergo a physical exam, it is most likely after he or she has been hired, and these physicals are not necessarily presented as a vetting, but as a “perk.”  Pre-employment physical exams appear to be simply a task checked off the hiring list.  The candidate that reaches that stage has already been identified as meeting the criteria for the position, and their physical assessment is unlikely to change the mind of the board.  Says Christine DeYoung, a partner at recruiter DHR International in Chicago, “I’ve never seen anybody not hire the CEO they wanted because of the physical.”

However, it does present a hardship for a company when a CEO falls ill.  The CEO may be either temporarily or permanently out of their position, or at least have their ability to do the job well compromised.  Recruiting a CEO can be a major investment for a company, and to have to go through the process again shortly after doing it once because a health issue is discovered can be a challenge.  The pre-employment physical gives the company an indication of the commitment the candidate will be able to make to the job and what the return on its investment will be.

Is it unethical, though?  Pre-employment physicals certainly cannot be used in a manner that would be considered discriminatory, and must take into account medical privacy issues and laws.  Some companies may attempt to assess candidates’ potential health issues through “loaded” questions in the interview process, but this is a slippery slope.  The willingness of a candidate to undergo the physical may be greater for someone who is more desperate to get the job offer, unfairly allowing candidates who are more in demand to leverage their way out of it, which also presents an ethical dilemma.

CEOs have stressful jobs that encompass duties across the entire organization, such as setting and following through on strategy, defining and modeling culture, building and leading the senior team, and budget/expense responsibilities.  All of these duties must be done in an efficient and effective manner.   In addition to pinpointing existing health concerns that might limit the tenure of the new hire, pre-employment physicals can simply be a means of assessing the ability of the candidate to handle the stress of the job; recruiter Dennis Carey of Korn Ferry told Fortune magazine that he advises clients to at least require a stress test of candidates.

It remains to be seen whether future incidents such as that of Oscar Munoz will override the impracticality of requiring physical exams for candidates and make it a more common practice.  It would be interesting to consider the economic impact such exams might net for companies in the long run.

Contributed by Holly Valovick, Quick Leonard Kieffer


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