The chairman of an Australian mental health foundation has called for performance bonuses of chief executives to be partially tied to the mental wellbeing of their staff.

Former Victorian Premier and Chairman of BeyondBlue Jeff Kennett has made the proposal to the Business Council of Australia.

"I want to make sure that rather than members of the BCA and industry leaders just calling for tax cuts, they also put a priority on the mental health of their staff," he told ABC on Monday.

"So I would have the board establish a KPI for the CEO, in terms of the conditions of the workforce, and I would have the CEO prepare the KPI for their direct reports."


Chief executives should also be subject to undergoing mental health checks, Kennett said.

"Increasingly I am finding as chairman of BeyondBlue I am getting calls from very senior either board members or CEOs that one of their direct reports has hit a brick wall -- in other words, the pressures on senior managers today seem to be increasing," he said.

"They are not seeking help because they are worried about how it's going to affect their employment, however the fact they are not well has a major impact on the well being of that organisation."

BCA chief executive Jennifer Westacott told The Australian the issue needed to be taken seriously.

"These things at a kind of bottom line result in unplanned absenteeism, they cost businesses money," she said.

"They're not just feel-good things. These are real economic things. That's why the Business Council is interested and passionate about this."

"I'm certainly open to sitting down with him, and I know companies will be, and saying, 'how do we improve our effort here and what are some of the incentives we would need to have?'"