The CEOs who golf the most are worse at their jobs, a study says.
President Donald Trump wants to run government more like a business.
And as many executives do, Trump also likes to play golf. According to an analysis in the Washington Post, Trump — who spent years criticizing Barack Obama’s golfing habits and promised on the campaign trail he’d be working too hard to hit the links — made 14 visits to his own golf courses in the first nine weeks of his presidency, likely playing golf on at least 12 of those occasions.
But if Trump wants to run the federal government more like a CEO runs a business, he might consider this bit of academic research: Researchers have shown a link between CEOs who play a lot of golf and those who run companies that underperform.
A few weeks after the election, a trio of researchers shared a study in the Harvard Business Review that had been published online by an academic journal last year. It examined the golfing habits of more than 350 CEOs of S&P 1500 companies between 2008 and 2012 who maintained a handicap with the United States Golf Association, meaning their scores and the number of rounds they play are recorded. It found that CEOs who play golf more often were associated with lower average return on assets and lower market capitalization.
“We find CEOs that golf frequently are associated with firms that have lower operating performance and firm value,” the researchers, Lee Biggerstaff, David Cicero and Andy Puckett, wrote in their paper. In their study, they wrote, “we provide evidence that some CEOs shirk their responsibilities, by showing that the firms with CEOs who play the most are less profitable.”
The applicability here, of course, has some real limits. The federal government does not have a market capitalization. Also, the researchers’ aim with the study was to look at how compensation affected CEOs and their leisure time. What they found, unsurprisingly, is that CEOs play golf less often when their pay is more closely tied to performance incentives. Presidents, of course, are paid a salary, not bonus incentives to do a better job. (Trump has also said he’ll donate his salary to charity.)
In an email, the researchers said they didn’t want to comment on Trump’s visits to the greens. “Our work is focused on the impact of financial incentives in the context of CEOs of publicly traded corporations and it may not directly translate to other settings,” wrote Biggerstaff, a professor at Miami University in Ohio.
Then, of course, there’s the fact that golf isn’t always leisure time. Dealmaking and relationshipbuilding certainly happen on the fairways, whether the topic in question is advanced merger talks or trade deals with foreign governments.