Chesapeake And Board Independence

Spending so much time reviewing non-traded REITs, I am always skeptical about the role and power of independent directors.  I'm of the opinion that strong personality CEOs dictate most non-traded REIT business, with independent directors rubber-stamping management decisions.   Independent director acquiescence to strong-willed executives is not limited to non-traded REITs, not by a long shot. 

Last year I linked to articles and commented on public energy company Chesapeake and its now former CEO, Aubrey McClendon.  McClendon left Chesapeake March 31, but not before a final act of board fealty:

McClendon, 53, agreed in January to resign no later than April 1 after a shareholder revolt by Carl Icahn and Southeastern Asset Management Inc.’s O. Mason Hawkins cost the CEO his annual bonus and the chairmanship last year. A board inquiry into McClendon’s use of personal stakes in company-owned wells to obtain more than $800 million in private loans cleared him of any intentional wrongdoing in February.  (Emphasis added)

Apparently, the SEC didn't buy the board's internal whitewash investigation and is increasing its investigation into Chesapeake and McClendon.