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Despite the notion that big business deals are done on the golf course, a new statistical study suggests the more time a chief executive officer spends playing golf, the less profitable his or her company is.

MARK BLINCH/Reuters

Despite the notion that big business deals are done on the golf course, a new statistical study suggests the more time a chief executive officer spends playing golf, the less profitable his or her company is.

The statistical analysis, based on a sample of 363 golfing chief executives in the United States, concludes that companies with CEOs who played more than 22 rounds of golf a year "have lower operating performance and firm values."

Those CEOs who spent the most time golfing also tended to have less "skin in the game" as far as their company is concerned, with lower stock ownership or weaker links between their compensation and their company's actual performance.

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Some CEOs in the study spent an enormous amount of time on the links. One unnamed chief executive of a U.S. company in the Standard & Poor's list of 1,500 top firms played a staggering 146 rounds of golf in just one year, the study says.

Spending too much time on your backswing can also be a career-limiting move.

According to the study, "higher golf play is associated with a higher probability of CEO turnover."

The idea for the research was partly sparked by news reports about James Cayne, the former CEO of Bear Stearns, who according to the Wall Street Journal spent 10 of 21 working days out of his office in July, 2007, playing golf or bridge as two Bear Stearns hedge funds collapsed and the U.S. financial crisis began.

But one of the study's co-authors, Andy Puckett, an assistant professor of finance at the University of Tennessee in Knoxville, Tenn., cautions the research doesn't mean that any golfing by a CEO is bad for business – only extreme amounts.

"The adage that business gets done on the golf course is probably true. There are probably a lot of productive deals out there," Prof. Puckett said in an interview, saying his study is instead "suggesting that executives who play 50 or 60 or 70 rounds a year are not using their time as productively as they should."

According to the study's numbers, the average CEO played a more reasonable 16 rounds a year in 2012.

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And the research, which covers the years 2008 to 2012, did show that most CEOs played "significantly less" golf in 2008 as the financial crisis sunk in and work presumably became more demanding.

The study, titled FORE! An Analysis of CEO Shirking, used golfing records for 363 CEOs from the S&P 1500 found in a United States Golf Association database where golfers record their scores. Fifty-seven per cent of the CEOs were considered "core" golfers, who played eight to 24 rounds a year, or "avid" golfers, who played 25 or more rounds a year.

And however well their company performed, a CEO who golfed more did tend to score better on the course, at least according to the USGA database's self-reported scorecards. Those who golfed the most shot 89.3 on average, while those more duffer-like CEOs who golfed the least averaged 94.6.

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