© Copyright 2012, The Oklahoman
New Chesapeake Energy Corp. Chairman Archie Dunham has no fear of challenging situations.
When he became a director of deepwater drilling company Pride International in 2005, Dunham stepped into a massive cleanup and overhaul as the company found itself deep in debt and embattled with federal violations for allegedly bribing foreign government officials.
“It took a number of years, a totally reconstituted board and a new CEO to make Pride back into an outstanding company,” Dunham said.
Dunham, an Ada native, once again is taking on a challenge as he leads a reconstructed board at Chesapeake, which has seen its stock price tumble on falling natural gas prices and heavy debt.
The company also is under investigation by the Securities and Exchange Commission and faces at least 17 shareholder lawsuits after it was revealed in April that CEO Aubrey McClendon used his personal stake in Chesapeake wells as collateral for up to $1.5 billion in personal loans.
Dunham retired as chairman at ConocoPhillips Corp. in 2004 after a 38-year career at the Houston-based energy company and its predecessors, including then-Ponca City-based Conoco Inc. Under Dunham's watch, Conoco Inc. completed what was then the world's largest initial public offering and grew into the third largest company in the United States with operations in 55 countries.
Since stepping down from ConocoPhillips, Dunham has served as a director on several corporate and civic boards, including railroad company Union Pacific, building company Louisiana Pacific and metals and chemicals company Phelps Dodge. He also has served on President George W. Bush's Commission on White House Fellowships.
Dunham also isn't afraid of long-term commitments.
Dunham has been married to his childhood sweetheart for 52 years.
Archie and Linda Dunham met when he was 15 and she was 13. They waited to marry until he graduated from the University of Oklahoma and was commissioned into the military. The military would not let ROTC members marry until they became officers.
“That was a good discipline, because we didn't have any money anyway,” Dunham said. “So we had a long dating and a long engagement.”
Dunham graduated on a Sunday and was commissioned that afternoon. The couple had their wedding rehearsal the next day and were married on Tuesday.
Former Pride CEO Louis Raspino said Dunham's character and commitment makes him the perfect choice to lead Chesapeake's board.
“He's going to be very tough, and he's going to be very disciplined,” Raspino said. “His opinions will always be governed by his very strong moral compass. He has a strong personality and makes his opinions known. I think Chesapeake needs that.”
Raspino became Pride's CEO about the same time that Dunham joined the board. The two worked closely together until Pride sold to London-based Ensco last year for $7.3 billion in cash and stock.
“The company at the time was an extremely broken company,” Raspino said. “It was in debt. It had poor infrastructure. It had grown in an uncontrolled way. It didn't have strategic focus.”
Raspino, Dunham and the board replaced most of the senior managers, sold $2 billion in assets, spun off other assets and invested more than $4 billion in growth in core areas.
Six years later, Pride became one of the strongest companies in its industry, with more than 4,000 employees worldwide and drilling operations in Brazil and West Africa.
Raspino credited much of the company's turnaround to Dunham and the Pride directors.
“Archie has an extremely strong ethical compass,” Raspino said. “His ethics and integrity and governance are beyond reproach. He's tough, demanding and fair.”
Dunham is in Oklahoma City this week getting to know Chesapeake's senior management.
One who needs no introduction is Mike Stice, Chesapeake's senior vice president of natural gas projects and CEO of subsidiary Chesapeake Midstream Partners.
Stice spent about 18 months as Dunham's executive assistant when both men were at Conoco, beginning in 1991.
Stice said the position, which he describes as the biggest break of his career, was affectionately known as “bag rat.”
“I did everything from carry his bags to help him with complex decisions,” he said.
Stice said he traveled around the world with Dunham as executive assistant to the man he still regards as a dear friend.
He said Chesapeake will benefit from Dunham's personal integrity and credibility in the marketplace.
Stice said Dunham, a devout Christian with a good work ethic, has the “strongest, disciplined core values I've ever witnessed.”
Dunham is not bothered by any rhetoric, Stice said, likely as a result of his time in the U.S. Marines.
“He's stable like a rock,” he said.
Stice said Dunham has proven he can get to the facts of a situation and make quality decisions, traits that will serve Chesapeake well in Dunham's new role as chairman.
Les Csorba is a recruiter who led Dunham to Pride and other boards. He was not involved in Dunham's appointment at Chesapeake, but he said the former ConocoPhillips chairman is a perfect fit.
“When I first heard they were going to go out and look for a new chairman, my first thought was that they needed a seasoned energy executive who is widely respected both from a board governance perspective and an operating perspective,” Csorba said. “Archie was the first person who came to mind.”
Csorba also is the author of “Trust: The One Thing That Makes or Breaks a Leader.”
He said Dunham is a great choice for a company that has had significant trust issues over the past several months.
“There are different levels of trust,” Csorba said. “There's a personal trust that's the kind of trust you build throughout your relationships, your integrity and keeping your word. Then there is an expertise trust you build through your confidence and skills. Archie has built both high levels of personal and expertise trust over the years.”
Csorba said Chesapeake already has begun rebuilding trust by bringing in Dunham and the other new directors.
“I think they've already made some of the first steps in rebuilding that trust with new leadership on the board,” Csorba said. “I think Chesapeake is being more transparent and open. I think Aubrey has done some of the necessary things to rebuild trust. Then you need the right kind of leadership. I'm very confident that working with Aubrey and the rest of the management team, they will rebuild Chesapeake into the great company.”
At a glance
1938: Year born
1943: Family moved to Ada
1960: Graduated from the University of Oklahoma with a degree in geological and petroleum engineering and received a commission as a second lieutenant in the Marines. Two days later, he married high school sweetheart, Linda.
1966: Graduated from the University of Oklahoma with a master's degree in business administration. He then joined Conoco Inc. as an associate engineer.
1976: Executive vice president of Conoco subsidiary Douglas Oil Co.
1979: Vice president of logistics and downstream planning for Conoco Inc.
1985: Conoco's executive vice president of petroleum products in North America and was elected to the board of directors
1987: Senior vice president of chemicals and pigments at Conoco's then-parent company DuPont.
1991: Conoco's executive vice president of exploration production
1996: Conoco's president and CEO
1999: Conoco's chairman
2002: Chairman of the newly formed ConcoPhillips Corp.
2004: Retired from ConocoPhillips
SOURCE: HORATIO ALGER ASSOCIATION OF DISTINGUISHED AMERICANS INC.