Stanford Study Highlights Impact of Divorce on CEOs

By | Published On: July 2, 2014

There’s no question that divorce causes great anxiety and stress for those going through it, as well as creating a sense of losing control over one’s personal life. Study after study has shown that the disruption and sense of loss of control that divorce causes in one’s personal life can wreak havoc on even the coolest of heads.

One recent survey illustrates that top corporate executives are not immune to the emotional and psychological stress brought about by divorce, and what is more, that it can have a detrimental effect on their work. Stanford University professor David F. Larcker argues that a CEO’s divorce can impact his or her productivity, concentration and energy, and can also affect the CEO’s approach to risk. In Separation Anxiety: The Impact of CEO Divorce on Shareholders, released in October of 2013, Larcker cites studies that suggest a notable decline in corporate productivity following a CEO’s divorce. A further concern identified by Larcker is that a sudden change in wealth, which may accompany a divorce, could affect the CEO’s attitude towards risk and thus affect his or her judgment.

So, if you are a corporate executive facing a divorce, what steps can you take to reduce the likelihood your change in marital status will detract from your effectiveness as a corporate leader?

A key decision you’ll face very early on in the process is who you choose to represent you in your divorce.

One set of desired attributes relates to how the attorney makes you feel:

  • Do they “get” your situation?
  • Does the attorney have time for your case, return your calls promptly and have an office staff responsive to your needs and concerns, and can interface effectively with your own assistant and other staff?
  • Does the attorney’s advice make sense to you in light of your unique goals?

Another set of desired attributes relates to how the attorney can be expected to interact with your spouse’s attorney:

  • Do they have a reputation for settling cases, as opposed to ending up in litigation?
  • Does the attorney want to know about your spouse’s priorities as well as your own, and do they try to identify outcomes that accommodate both parties’ goals?
  • Do they have an adversarial style, which is likely to inflame feelings and undermine positive post-divorce relationships, or a cooperative style, which facilitates constructive communications and problem-solving?

A second decision of central importance is the selection of the process you’ll use to resolve the issues in your divorce matter. Out-of-court settlement processes, which emphasize finding mutually agreeable solutions and striving for outcomes that put the needs of the children first, are less stressful, less expensive and less destructive than adversarial negotiation and litigation processes. The Collaborative divorce process, in particular, excels in creating a safe space where the parties can identify their most important priorities and then generate options that address both parties’ priorities in a mutually agreeable way.

If remaining productive and minimizing distractions from your professional objectives are important to you in your divorce, then hire counsel with a constructive, forward-looking approach and select an out-of-court settlement process that fosters mutually advantageous outcomes.