Lame Leader of the Week: Aubrey McClendon

Not quite fair to tag Chesapeake Energy CEO Aubrey McClendon Lame Leader of the Week – at least not without making clear he did not act alone. In the shenanigans that apparently constittute business as usual over at Chesapeake, McClendon’s board was manifestly complicit in what went wrong, if not explicitly, then implicitly. Hard questions are finally being asked about McClendon’s personal financial transations with firms that have a relationship to his company. More to my point, members of Chesapeake’s board are finally distancing themselves publicly from the CEO who, while ostensibly accountable to them, nevertheless was allowed to go his own way, largely unmonitored and uncontrolled. From this distance, there seems little question that McClendon was, at the least, guilty of bad judgment. Why then did his board play puppy dog for so long? Why did it, like so many other boards of so many other organizations, abdicate its responsibility and turn a blind eye to its own fiduciary responsibility? Why did board members follow the leader – rather than lead the leader? Chesapeake’s board finally got fed up all right, but only after Chesapeake’s stock plunged 27% in one month, only after pressure from shareholders, and only after their own personal well being was threatened . So in this case the most knottty question is not why McClendon strayed but how. How was he allowed for so long to be left home alone? What can and should be done about problems of corporate governance that persist – and that have their genesis in small group dynamics about which members of these small groups, boards, remain largely ignorant?

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