He told members at Wednesday's AGM that the "damage is extremely hard to measure" but vowed to continue to defend the club's integrity in the strongest possible fashion.
Spotlight on Connolly as verdict looms
He revealed that the club had appointed a sub-committee to deal with the day-to-day issues arising out of the tanking investigation and to ensure distractions to the football department were minimised.
The club has been the subject of an AFL investigation into its performance during the 2009 season for the past seven months amid allegations that it deliberately lost games in order to qualify for a priority pick in that year's AFL draft.
Key Demons will fight tanking charges
The club qualified for the extra pick after winning just four games that season and used picks No.1 and No.2 to select Tom Scully and Jack Trengove. Scully joined Greater Western Sydney in 2012.
McLardy told members that the high-profile investigation had been " for many of those involved a difficult and trying time personally".
But he was confident of the path the club had taken and the skill and resilience of the personnel within the organisation to manage the situation.
He also acknowledged that the club's lack of public comment made it difficult for supporters.
"Our position of not providing a running commentary has not changed in seven months since this investigation began despite the incredible amount of media pressure around us," McLardy said.
"We believe this approach is in the best interests of our club although the board fully understands it is difficult for our concerned supporters who would like more information.
"The impact on our club has been massive and in many ways the damage is extremely hard to measure."
Representatives of the club and other parties subject to the investigation were given documents outlining the result of the investigation before Christmas.
They sent their response to the AFL by the January 29 deadline.
While Melbourne has not revealed what was in their response McLardy made some general points in his statement at the AGM: "Firstly, we have at all times cooperated fully and transparently with the AFL investigation and we respect the absolute right of the AFL to protect the integrity of the game.
"We have and will continue to defend the integrity of the football club in the strongest possible fashion and for anyone to suggest that our players did not give their all every time they went on the field is not acceptable to us.
"We will continue to defend the rights of all our past and present club employees where we believe it is necessary to do so."
The AFL is yet to announce whether charges are to be laid.
Most observers expect a response well before the next scheduled AFL Commission meeting on February 18.
