3.1.4.3. Currently Active CEOs on Board. Hallock (1997) andWestphal and Khanna (2003) emphasize the role of networks among
CEOs that serve on boards, and the adverse impact on the governance of such firms. Ex ante, there is no reason to believe that this
variable will be correlated with firm performance. We consider the percentage of directors who are currently active CEOs as an
instrument for governance.