A Culture of Greed at Chesapeake Energy

Abstract

Together, the founders of Chesapeake Energy Corporation – CEO Aubrey McClendon and President Tom Ward – built the company through hard work and vision. Their initial style of ‘growth through the drill bit’ identified an industry niche in unconventional methods for extracting gas. In our case study, we reflect on McClendon’s style of leadership and his decisions even as Chesapeake’s Board of Directors was trying to reign in his drive to grow via leveraging and acquisition. Unfortunately, McClendon took the company into a tailspin with enormous debt before the Board could act and remove him as CEO. At the time of this writing, Chesapeake still has their head above water as their new CEO attempts to change the financial status of the company. The future does not look bright as employees and shareholders are fleeing. The financial woes brought on by McClendon via an unchecked and unsustainable leveraging position is likely too much to bear.