“Certainly the addition of four new directors is what is needed on the board, and the expectation is that things will change,” he said.
While numerous shareholder groups have called for changes to the Chesapeake board, there have been few public calls for McClendon to step down as CEO.
Garland said that decision is best left to the new directors.
“Let's fix the board and let the board determine whether or not McClendon should stay on as CEO,” he said.
“The current board isn't able to make that determination, but within two weeks, we should have five new directors to a nine-person board. Our expectation is that those will be qualified, independent directors. At that point, we'll look to the board to make those kinds of determinations.”
Chesapeake and its directors have faced intense scrutiny since April 18 when it was first reported that CEO Aubrey McClendon used his personal stake in Chesapeake wells as collateral for up to $1.1 billion in personal loans.
Chesapeake's planned changes have drawn praise from analysts and industry observers.
Argus analyst Philip Weiss has been a frequent critic of Chesapeake, but he upgraded the company's stock to “Hold” from “Sell” on Wednesday.
The stock dipped almost 2 percent on Wednesday, closing at $17.85 a share.
“While we remain concerned about the company's liquidity, particularly given the decline in natural gas and oil prices, we view the planned changes at the board level following Carl Icahn's investment ... as incremental positives,” Weiss stated.
Still, challenges remain, he said.
“At the same time, our view of CHK (Chesapeake) remains cautious at best,” Weiss said.
“The company's problems with debt, liquidity and cash flow, along with the negative impact of falling commodity prices, will not disappear simply because of changes in the composition of the board,” he said.
Shareholder advisory group Institutional Shareholders Services last month criticized Chesapeake's directors for not providing adequate oversight of McClendon in his personal dealings with firms that do business with Chesapeake.
ISS had called for shareholders to vote against Hargis and Davidson, but it had a lukewarm response to this week's Chesapeake announcement.
“While acknowledging the potential benefits to shareholders of the announced actions, ISS vote recommendations remain unchanged,” the group said in a statement.