LAST week saw the airing of some dirty corporate laundry in front of a parliamentary inquiry committee. Mike Ashley, owner of Sports Direct, and Dominic Chappell – who acquired BHS from Sir Phillip Green last year – have been called to answer serious allegations regarding how they run their businesses. The allegations include Dickensian workhouse practices at Sports Direct where the “six strikes” command and control culture reportedly led one woman to give birth in the staff toilet because she feared losing her job if she took time off sick, to warehouse staff having to work unpaid for 15 minutes at the end of every shift because they had to endure personal searches and surveillance to reassure Ashley that they weren’t pilfering any goods. This practice means Sports Direct staff earned less than the legal minimum wage. HMRC are not happy about it.

Then on Wednesday, BHS chief executive Darren Topp alleged to the committee that Dominic Chappell had threatened to kill him if he dared blow the whistle on Chappell’s £1.5m transfer of funds to BHS Sweden. Chappell has denied the claim, which Topp further embellished by saying Chappell had, in the same phone call, reminded him that he used to be in the helicopter division of the SAS and, said Topp, “it was well known that he (Chappell) owned a gun”.

The plot is bound to thicken when Sir Phillip Green appears before the inquiry next week to answer questions on the BHS pension pot, which doesn’t appear to have enough in it to guarantee pensions to its staff.

These reports got me thinking about the whole matter of leadership within organisations. Research shows that “toxic leadership” is increasing across the world, with at least one in five company leaders being defined in this way. (Recent research by Professor Theo Veldsman at the University Of Johannesburg, suggests the incidence of toxic leadership could be as high as three in 10.)

So-called “toxic leaders” are often described as corporate psychopaths who undermine the dignity, self-worth and efficacy of individual employees in order to advance their own pathological desire for power. They do this in various ways: by bullying, charming, coercing, intimidating, lying, conspiring and destabilising the organisational structure by spreading rumours about other employees. They are highly skilled in devaluing the contribution of others and demand hugely unrealistic levels of loyalty from their staff. They share many of the traits shown by criminal psychopaths such as lack of empathy, inability to feel guilt or remorse and an absence of conscience. Their Machiavellian posturing often makes them appear clever and competent, but more often than not, toxic leaders will harvest the creativity and inventiveness of others, and make it their own. Usually, they will leave the organisation in a worse state than when they joined it, their only legacy being a dark vapour trail of humiliation and destruction.

Due to their inability to tolerate criticism or challenge, they operate autocratic regimes which actively discourage collaboration and engender a climate of fear among their employees. Toxic leadership is bad for profits in the long-term and unlikely to support the organisation’s enduring survival. The problem is: how do we spot them before they cross the organisational threshold?

Perhaps the first step is to better educate senior personnel on what constitutes good and bad leadership, with more value being attached to attributes such as emotional intelligence. Pre-employment, there should be much more rigorous psychological assessment to root out extreme narcissistic and sociopathic tendencies in prospective managerial recruits. Once in post, it would help to have a longer probationary period of 12 rather than six months, so that when toxic traits emerge, there is a mechanism for managing the individual out of the organisation.

This is especially important because research shows that once inside, the toxic leader will quickly destabilise and destroy existing working alliances, thus making it easier for them to get promoted and to appear calm amid the chaos they have deliberately created. A healthy organisation needs a robust whistle-blowing process where staff will feel confident in sharing any concerns and trust that the organisation will take them seriously. Performance reviews should ideally be conducted by an external assessor with no vested interest in keeping a toxic leader in place – either because they have been groomed into their dark circle or because they fear retribution and punishment. Ultimately, toxic leaders destroy lives and businesses and we should treat them like the killer virus they are.