Successfully running a large company is kind of like running a marathon: Both require diligence, commitment, work ethic and strategy. But does being a marathon runner make you a better leader?
Yes, at least according to new research published on the Social Science Research Network, which "finds a positive relation between CEO fitness and firm value."
The researchers set a pretty high bar for what they deemed to consider CEO fitness -- i.e. successfully completing a marathon in a given year (jogging a few times a week doesn't cut it).
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Using data on CEOs of S&P 1500 companies from 2001 to 2011, they determined which CEOs had, on any given year, completed a marathon, and matched these findings with each company's market value as compared to its book value from that same time period. Companies helmed by marathon runners, the study found, were 5 percent more valuable than those led by non-"fit" executives even after controlling for CEO, firm and governance characteristics, past performance and firm fixed effects.
The researchers wanted to show that marathon runners made better executives because of their increased fitness, not because marathon runners, as a group, share similar pre-existing characteristics.
To do this, they looked at groups of CEOs who were particularly likely to experience high levels of stress "under which CEO fitness should be most beneficial," including older CEOs (over the median age of 55), high-tenure CEOs (increased risk of burnout), and CEOs with a high workload (defined by the study as those who sit on multiple corporate boards). In each of these 'high stress' groups, companies led by a "fit" CEO were 8 percent to 10 percent more valuable.
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This, of course, doesn't entirely eliminate the possibility that marathon-running CEOs share personality traits that make them good at their job, but the study's authors are nonetheless confident they're onto something.
"Fitness moderates stress and increases cognitive and job performance. Thus, it should be relevant for CEOs as they face high levels of demands and responsibilities, particular work stress and physical requirements," the study concludes, before taking things a step further: According to the study's authors, a chief executive's fitness level is a pertinent piece of information that should inform shareholders' investing decisions and executive recruiting firms' hiring choices.
In other words, the next time you're deciding whether or not to invest in a company, do your due diligence and make sure its CEO has run a marathon in the past year.