Associate Professor of Finance and Joseph R. Perella and Amy M. Perella chair
Anne-Marie Anderson, associate professor of finance and Joseph R. Perella and Amy M. Perella chair is excited about her current work on corporate social performance of classified boards in “Declassification’s Downside.” The study investigates the benefits of a classified board (one that has three subgroups and rolling turnover) and a regular board, which is re-elected in full every year. Anderson wants to find out if having a classified board affects a company’s adoption of CSR-focused policies, because a rotating board might be more likely to have a longer-term focus. So far, results are mixed. “There has been a move from classified boards and we are trying to show that they can be a good thing,” Anderson says.
Anderson has been busy in the past few years, publishing a piece in the Financial Review on debt issuance in the face of tax loss carryforwards with fellow professor Nandu Nayar, which looks at the market reaction to debt issues and whether debt issuances can be harmful if the company in question already has losses. She has also delved into microfinance research and ethics, reviewing the benefits and problems of microfinance, such as the issue of lending to underprivileged borrowers and profiting from returned loans and interest. She says there’s also a problem with the measure of success in microfinance, or lack thereof. “At what point does someone graduate from being a microfinance client to being a regular bank client?” Anderson asks. She proposes that microfinance may not be effective in helping poor clients rise up.
She’s also been involved in leadership research, including the contentious issue of the SEC ruling on director elections with “Empirical Estimates of the Value of Voting Rights in Mergers,” reviewing whether the ruling on votes will actually make a difference, as directors are very rarely not elected and “Market Reactions to Outside Director Resignations, Deaths, and “The Sweet Spot of Director Tenure,” which focuses on how the market reacts to director departures such as Steve Jobs’ recent retirement.
When Anderson is not researching or in the classroom, she is also the director of Lehigh’s Financial Services Lab, a free lab that allows students to research, understand and use financial data right in Lehigh’s Rauch Business Center. Anderson finds that much of her research is helpful in the classroom, bringing her research on debt issues into capital structure discussions, and her governance work into lessons on corporate restructuring and mergers and acquisitions.
Anderson also made news in 2007 with “The Cost of Being Good,” which focused on socially responsible investing and how it affects your portfolio. The study, completed with Lehigh finance professor David Myers, showed that it’s possible to base your portfolio on companies that take the environment into account, aim for high quality products or treat their employees well--or whatever else you consider a social responsibility—and still come out on top. “You’re just as good off if you invest with your beliefs,” Anderson says.