By Bryan Hay
Digging into data on CEOs who hold hunting and fishing licenses, Prof. Steve Swidler and his research colleagues examine how corporate leaders make strategic decisions and implement ideas based on their participation in outdoor activities.
In their paper, “Hunting and Fishing CEOs: Environmental Plunderers or Saviors?”, published by the Journal of Business Ethics, Swidler, Walter E. Hanson/KPMG Professor of Business and Finance, Thomas Covington, assistant professor of finance, College of Business Administration at Loyola Marymount University, and Keven Yost, chair, department of finance, Auburn University, identified CEOs of firms in the S&P 1500 index between 2003 and 2018 who held hunting and fishing licenses issued in 21 states.
Despite their enjoyment of the outdoors, these corporate leaders made decisions that harmed the environment, rather than trying to protect it, the researchers conclude. And their companies were more likely to incur a significant financial settlement for violating federal environmental laws.
“The evidence consistently implies that firms led by CEOs with a high sporting intensity make less favorable environmental decisions regarding climate change, pollution, and natural capital,” the paper summarizes.
Swidler and Yost, former colleagues at Auburn, were approached by Covington, who pitched them an idea of pursuing a study about corporate decision making.
“At its core, that’s what this is really about: How do corporate executives make strategic decisions?” Swidler says. “Here in economics, we talk about profit maximization and how marginal revenue equals marginal cost. Well, all of that, at some level, is just a little bit theoretical. The question is, how do you really implement some of those ideas as a leader of a corporation? What is it that affects your decision-making process?”
The hunting and fishing licensed CEOs identified in the paper tended to be relatively insensitive to the environment, and their firms did things that were not friendly toward the environment with respect to pollution and climate change, he notes.
“Going into this project, all of us really didn’t know what to expect. We believe this is the first research of its kind,” Swidler adds. “We became curious about whether spending time in nature would make you more positively predisposed or negatively predisposed to making choices about impacts to the environment. You could certainly make the argument that you, as a sports person, really appreciate the outdoor wilderness and want to preserve it. But that seemed to have, for the most part, not taken place during the years we examined.”
Swidler emphasizes that the paper is apolitical and has everything to do with casting light on the decision-making process.
“The main issue is how people make decisions. And this is very much consistent with some management theories. The one that we have suggested in the paper is something called upper echelons theory,” he adds. “Upper echelons theory is this notion that the experiences and values of the individual, the executive, determine what the decisions actually are.
“If you are often found either hunting or fishing, over time, cumulatively, how does that affect the decision making, especially with respect to things that have to do with the environment?”
Swidler takes a measure of pride in his affinity for finding unusual and creative research topics, including a look at how certain descriptors, adorable, in particular, increase property value, and his often-cited 1995 paper that examines the wagering behavior of the “uninformed” horse racing bettor, and how they have a level of importance by spawning other questions.
“This is one of those situations,” he says. “When we look at how CEO decisions affect social outcomes, you begin to wonder how CEOs lead their lives? Do they drive electric cars? Do they take short showers? It’s endless.”
