President Trump wants to run government more like a business. He campaigned on his dealmaking chops, stocked his Cabinet with business executives and announced a "SWAT team" aimed at bringing business ideas to the government.
But if Trump wants to run the federal government more like a CEO runs a business, he might consider this bit of academic research: As it turns out, 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," wrote the researchers, Lee Biggerstaff, David Cicero and Andy Puckett, 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. In addition, 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. And 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, one of the reports co-authors and now a professor at Miami University in Ohio.
Then, of course, there's the fact that golf isn't always leisure time. Dealmaking and relationship-building certainly happen on the fairways, whether the topic in question is advanced merger talks or trade deals with foreign governments. Trump press secretary Sean Spier has made this point, saying Trump has used a golf game with Japanese Prime Minister Shinzo Abe to "help foster deeper relationships;" he's also said visits to his golf courses haven't always included actual play.
Still the research provides a business world reminder that extreme golf habits by CEOs have been linked with worse professional performance. The question, thenk is what's considered extreme. We've long known what's a lot for presidents -- Woodrow Wilson was said to have played more than 1,000 rounds during his eight years in office, Dwight Eisenhower played 800, and yes, Barack Obama easily fits into the National Golf Foundation's "avid golfer" category with his more than 300 rounds as president.
This study gives us a clue about what that number would be for busy CEOs. On average, it found, they played 16 rounds a year. Those in the top quartile -- the ones whose return on assets were 100 basis points lower -- played at least 22 rounds a year. Where Trump will end up is unknown. But if he keeps up the current pace some have tallied, the number could indeed be, well, bigly.
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