When the Leader Is the Toxin

Most organisations have a policy for toxic behaviour. It is in the handbook, somewhere between the leave policy and the IT acceptable use guidelines. It defines what is unacceptable, what the reporting process is, and what the consequences should be.

Few organisations have the courage to apply that policy to the people who matter most. The high performer. The long-tenured manager. The person with the relationships, the knowledge, the revenue history. The person who would be genuinely difficult to replace.

That is where culture actually gets decided. Not in the policy document. In the moment when someone with power chooses whether to enforce the standard or protect the person.

Gallup's 2025 State of the Global Workplace report found that only 20% of employees globally are engaged at work. A significant portion of that disengagement comes from the daily experience of working for, or near, someone who creates fear, humiliation, or chronic stress. The policy says that behaviour is unacceptable. The daily reality says it is tolerated, because the person who does it is too valuable to lose.

That message is heard more clearly than any values statement.

The cost of a toxic leader is not limited to the people they directly manage. It spreads through the organisation in ways that are hard to measure but easy to observe. People avoid raising concerns because they know the leader will punish them. Good ideas are not shared because the environment does not feel safe. High performers leave because they can find somewhere that treats them better. The people who stay are often the ones who have learned to tolerate the behaviour, which is not the same as thriving in it.

The financial cost is real. Gallup's retention research puts replacement costs at up to 200% of annual salary for senior roles. When a toxic leader drives out multiple good people, the cost accumulates quickly. But the more significant cost is the opportunity cost of the people who never reach their potential because the environment does not allow it.

The organisations that handle this well have a simple principle: the standard applies to everyone, and the standard is enforced by behaviour, not by words.

They do not rely on HR to manage toxic leaders. They rely on senior leaders to confront them directly, to set clear expectations, to follow through when those expectations are not met, and to remove people from leadership roles when they cannot or will not change. That is a hard conversation. It is also the only conversation that actually changes behaviour.

The alternative is to create a two-tier culture. One standard for most people, another for the people who are too valuable to hold accountable. That two-tier culture destroys trust faster than any other single decision. It tells everyone in the organisation that the values are negotiable, that performance excuses behaviour, and that the people at the top are not serious about the culture they claim to want.

When a leader is the toxin, the organisation has two choices. It can act, which is difficult and carries short-term cost. Or it can avoid acting, which is easier in the moment and carries long-term cost that is often invisible until it is too late to reverse.

Most organisations choose the second option. That is why toxic leaders persist, and why culture problems are so hard to solve.

---

Sources

1. Gallup, "State of the Global Workplace: 2025 Report."
2. Gallup, retention and replacement cost research.

Related operating context: Why Accountability Is a Gift, Not a Threat – Culture Is What Happens When the Leader Leaves the Room – Psychological Safety Is Not a Wellness Initiative.