Editor's Note: A previous version of this article incorrectly stated that Chesapeake CEO Aubrey McClendon borrowed funds from companies he controlled, rather than from third-party institutions, and mischaracterized the nature of personal work performed for McClendon. The Fool regrets the errors.

My praise and contempt for CEO actions are pretty well known around these parts. I've been running a weekly series looking at CEO gaffes for nearly nine months now (with seemingly endless material, may I add), and recently I've begun highlighting incredible CEOs who deserve a pat on the back. Last year I even listed my top 10 CEOs of the year and my 10 worst CEOs of the year.

However, this year we're changing things up a bit, and we're putting the ball in your court! This year The Motley Fool community is going to decide who the best CEO of the year is, and which CEO should be banished to a distant island.

Each week over the next six weeks, I'm going to highlight one CEO who's worthy of being called the best CEO of 2012, as well as a CEO who could easily be called the worst of 2012. In total, you and your community members will have eight great CEOs and eight terrible ones to choose from when voting commences in November.

In the meantime, I encourage you to get the discussion started on the CEO of the Week board. Although I do have all the nominees handpicked already, these selections are by no means set in stone. If you can offer me your top picks for best and worst CEO, as well as your reasoning, you may just find your nomination in the spotlight.

Without further ado, I give you the third nominee for worst CEO of the year: Aubrey McClendon, CEO of Chesapeake Energy (NYSE: CHK).

Why Aubrey McClendon?

  • A $1.1 billion conflict of interest: The market reacted with shock earlier this year when Reuters reported that McClendon borrowed $1.1 billion from three third-party institutions, $500 million of which came from EIG Global Energy Partners, which had also been a large financer for Chesapeake. In securing personal loans from his company's business associate, McClendon exposed himself to a potential conflict of interest, as it's reasonable to expect him to feel pressure to serve EIG's interests in future corporate transactions, potentially at the expense of the best interests of shareholders. For the CEO of a company to put himself in such situation is not a shining example of corporate governance, even if no actual conflict arises. 
  • Failed to anticipate a shift in energy trends: It wasn't a secret that natural gas prices had been falling precipitously in the past year, yet it took McClendon and Chesapeake months to scale back their natural gas production and gear themselves up to produce greater volumes of natural gas liquids and oil. Royal Dutch Shell (NYSE: RDS-A) (NYSE: RDS-B), Chevron (NYSE: CVX), and EnerVest agreed to purchase Chesapeake's Permian Basin assets in mid-September for $3.3 billion as part of $6.9 billion in total asset sales, but it's still late to the game. Canada's largest natural gas producer, EnCana (NYSE: ECA), has been reducing its natural gas asset exposure since February, when it sold a 40% stake in its undeveloped British Columbia assets to Mitsubishi for $2.9 billion.
  • Poor stock performance: Another factor that'll get you nominated to this list of dunce caps is poor stock performance. Mired in scandal and scrambling to sell assets to cover what is usually a robust capital expenditure budget, Chesapeake has seen its share price hammered in 2012, down more than 13%. The broad-based iShares Dow Jones Oil & Gas Index, which includes Chesapeake Energy, is up more than 5% in comparison.
  • Focused on his own interests: We learned in May, again from Reuters, that McClendon was running a $200 million commodities hedge fund on the side from 2004 through 2008 that traded the same commodities that Chesapeake produced. Keep in mind, McClendon was forced into a $552 million margin call and forced to liquidate more or less his entire stake in the company in 2008 because of his personal gambles. Again, can we say conflict of interest?
  • Used the company as a personal piggy bank: If you're an Aubrey McClendon fan, turn away now, because we're going to look at some of the absurd ways McClendon's company has spent money in recent years. According to Reuters, a unit of Chesapeake Energy known as AKM Operations spent some $3 million on personal work for McClendon in 2010, including accounting and engineering work, taking up 15,000 working hours. This is on top of other questionable expenditures, including private use of the company jets as well as a corporate deal worth $36 million to sponsor the Oklahoma City Thunder, the basketball team in which he owns a 19% interest.
  • Because Fool Matt Koppenheffer says so: Last, but certainly not least, McClendon should go because my Foolish colleague Matt Koppenheffer vehemently believes he should go! On top of poor leadership, McClendon has surrounded himself with friends and colleagues who are paid an average of $533,000 per year, and who also enjoy many of the same "perks" that McClendon enjoys, like use of the company's private jet. Need I remind you as well that this is the same board that approved using $12 million in company funds to buy an antique map collection from McClendon when he was in a $552 million margin call!

Is Aubrey McClendon the worst CEO of the year? That's going to be up to you and the rest of The Motley Fool community to decide. In the meantime, come back on Tuesdays and Thursdays for the next six weeks for the latest nominations, and be sure to hit up the CEO of the Week board to voice your opinion to the community.

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