The Link Between Leadership and Employee Mental Health

In January 2020, Horta-Osório, the CEO of the Lloyds Banking Group, sat down for a BBC interview to discuss the link between leadership, mental health and business performance - challenges Horta-Osório is all too familiar with. 

Taking the lead.  

Shortly after assuming the role of chief executive in 2011, Horta-Osório was hospitalised for what was described at the time as a “stress leave.” In 2017, he revealed publicly that, in fact, after five days of insomnia, he’d checked himself into a private clinic to stave off a mental breakdown. 

“I was not used to asking for a lot of advice or showing a lot of (emotion) because I’d been a CEO since the age of 29 and it is a very lonely job,” he told The Times back in 2017. “To go from there to this humble experience and learning to ‘share’ with someone else, yes, it required some learning, I admit.” 

Horta-Osório said that experience motivated him to start a mental health awareness programme for his senior executive team and provide the resources to train thousands of employees in mental health first aid. He also ensured that the bank’s employee health insurance included as much coverage for mental health as physical health. 

Where mental health and business performance meet 

Although Horta-Osório was responding primarily to his own deeply personal experience, he was also aware that mental illness is a critical business issue that all leaders must consider. 

There is a surprisingly strong connection between mental health and organisational success. The World Health Organisation has estimated that more than 300 million working people suffer from depression, an affliction that costs the global economy more than $1 trillion US annually in lost productivity. 

However, even with role models like Horta-Osório, the stigma surrounding mental health in the workplace remains pervasive. Sadly, the different ways leaders contribute to mental health problems are also too common.  

The impact of leadership style on mental health 

The prevalence of toxic leadership and a general lack of psychological safety in the workplace continues to be a major issue. Although there are many threats and flashpoints in the workplace, a significant factor is the leaders who bully, threaten or publicly demean their employees or colleagues. 

One might think that the global work-from-home phenomenon would mitigate the impact of those leadership styles but the virtual world offers no refuge from these workplace bullies. It is just as easy to bully or demean someone in a video call as it is in-person, sometimes even easier because of the way virtual technology can embolden and normalise bad behaviour. 

Avoid adding to the stress we’re all feeling 

Toxic leadership in a virtual work environment takes on more weight when you consider that working from home is already an inherently stressful situation. 

Recent polling by the San Francisco-based Kaiser Family Foundation – a non-profit and non-partisan think tank specialising in health issues – found that there is a steady increase in the number of Americans reporting negative mental health impacts as a result of the pandemic. 

In a poll taken from 11-15 March 2021, 32 percent of respondents said they were suffering negative mental health impacts. In a similar poll taken from 25-30 March, only two weeks after the economic lockdown began, that number had risen to 45 percent. 

What does all this mean for today’s business leaders? The battle against the stigma of mental health is ongoing and leaders must play a crucial role in encouraging a more open dialogue about getting help when it’s needed most. 

They must also recognise that they can contribute to mental health problems with abusive behaviour. Although this kind of toxic leadership is ill-advised at the best of times, it becomes more impactful at a time when mental health is already being tested by the pandemic. 

Leaders can be powerful advocates for mental health but only if they are willing to confront their own needs and take a hard look at whether they are more a part of the problem than the solution. 

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