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Strategically, Chesapeake Energy Corp. (NYSE:CHK) is a great business with a long, bright future. Chesapeake had been the largest independent natural gas producer in the U.S., with significant cross-interests in oil, a creative approach to bringing in international majors without losing control over projects and some of the most attractive drilling acreage around.

It's positioned for a decade of growth – at least. What's more, now that the shares have been sold off, Chesapeake is incredibly attractive from an investment standpoint, too. (In fact, we're taking advantage of the company's growth potential in my Energy Advantage right now.) So don't get me wrong when you see what I have to say today. I love the company.

But Aubrey. Oh Aubrey… I don't normally devote an entire column to criticizing a company executive. But I have had enough of these shenanigans by the company's fast and loose CEO and co-founder Aubrey McClendon. The stock is down some 8% as of 1:30 p.m. Monday afternoon. This downturn follows another disclosure about Aubrey's "activities." This time, there are allegedly email records of his attempts to suppress land-bidding fees with normal competitor Encana Corp. (NYSE:ECA). And this may end up in the lap of federal investigators.

While this might be concerning to anyone, I don't want anyone to overreact. I only see this as a temporary problem – and one that creates even more of a buying opportunity for potential shareholders. Nonetheless, the time has come for more drastic action on the corporate side. Carl Icahn bought up 5+% of Chesapeake shares in late 2010. He has a big stake in the company and has increased his position on the CHK board. Icahn has long called McClendon's actions "irresponsible".

No wonder the board recently separated McClendon's positions of CEO and president from the board chairmanship. The company then recruited former ConocoPhillips (NYSE:COP) head Archie Dunham to become its new chair. Dunham is a legend and one of the most shareholder-friendly chief executives to grace the sector in a generation. He also has one other advantage – no previous connections at all with Chesapeake.

However, by separating the chairmanship from the CEO and president posts, the company can now do something unthinkable even a few months ago. It can – and should – sack McClendon. The time has come… In a string of revelations about McClendon's activities, stretching from the current big rigging back through him running a personal hedging business off the company books (and until it was revealed, beyond the eyes of stockholders) and pocketing royalties from company wells, the company has been reeling.

The company is likely to face a federal investigation because of the cavalier attitude of its current head. Yes, McClendon was at one point regarded as a visionary, a true pioneer among a new breed of oil and gas guys. He was the founder of the company and moved it to the top when others were on the sidelines just watching. Okay, so put a bust of him in the lobby, but show him the door. CHK has lost 47% of its value since September 1, but had been recovering nicely of late – improving almost 18% for the month ending Friday. And then this latest revelation hit Monday morning.

Icahn has not been the only shareholder up in arms about McClendon's conduct. All three board members up for reelection at the last annual meeting failed to receive the majority needed to remain, and left as a result. It's time for the former board chairman to go as well.

The American entrepreneurial system has always produced iconoclastic figures, those who challenged the traditional way of doing things and led both companies and investors into brave new worlds. I used to think that, warts and all, Aubrey was one of those people. He remains one of the most fascinating individuals I have ever met. He possesses an enormous grasp of market conditions, projections, and insight to go along with an "I take no nonsense" approach to everybody.

It just turned out that he thought rules were for others. The deal, the profit, the win was the only thing that mattered. Now I certainly do not think that is always a bad approach in the balance of things. Investors, after all, want corporate leaders who provide them with consistent returns. But not at the cost of the company's reputation.

Chesapeake's fortunes have for so long been almost indelibly connected to the personality of McClendon. He was always swinging for the fences and leading the sector in both home runs and strikeouts. Brash, arrogant, upon occasion downright nasty, but always the sort of character we expected to head an expanding producer that still saw itself as a seat-of-the-pants wildcatter.

When he piled too much debt on the company, the analysts would express concern but explain it away as a necessary downside of conducting an unpredictable business. After all, Aubrey would always find an international major prepared to cut a seven-figure check for a minority position in a CHK project and cut the overhead.

However, when the company was indecisive with assets sales recently, sales essential to address capital balance problems, shortly after disclosures that the CEO had been privately profiting from each well and personally hedging prices on the side in the very product his company was producing… well, the luster was starting to wear off.

McClendon was betting both for and against his own company's performance. Ask Pete Rose what that does to one's personal image. It will keep Rose out of baseball's Hall of Fame. It should keep Aubrey McClendon out of the executive floor at Chesapeake Energy.

Chesapeake remains one of the companies best positioned as natural gas becomes central to our growing energy needs. I think the board can accelerate this in the future. It simply needs to take decisive action to oust McClendon.

Disclosure: No positions

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Source: Why Chesapeake Needs To Dump CEO Aubrey McClendon