Physically fit CEO, financially fit corporation.
That’s the conclusion of researchers who, using the completion of a marathon as a proxy for fitness, found that fit chief executives led more successful companies. A working paper describing the findings was posted Sept. 3 on the Social Science Research Network.
The researchers looked at CEOs of S&P 1500 companies from 2001 to 2011. They took note of which CEOs in each year had run a marathon, and measured the companies using a value-gauging metric called “Tobin’s Q,” essentially a comparison of a company’s market value to its book value.
They found that companies with CEOs who were marathon runners were 5% more valuable than companies led by CEOs who steered clear of the racing circuit.
There was a wider gap among CEOs who were particularly susceptible to the draining effects of stress. The researchers looked at groups of CEOs who were older than the median age of 55, who had longer tenures (and thus had been exposed to the pressures of the position for longer), and those who sat on multiple corporate boards (because they were presumed to have a higher workload). In each of these cases, companies headed by marathon runners were 8% to 10% more valuable.
Fitness alleviates stress and delays cognitive decline with age—effects with obviously benefits to corporate executives. That’s why running is more valuable to CEOs who are older or facing exceptionally high-pressure circumstances: allaying stress in those situations becomes more important, the researchers said.
CEOs already have started getting wise to this: apart from a dip during the Great Recession, the percentage of marathon-running execs rose steadily during the research period.