The Confederation of British Industry has suffered serious damage to its reputation following allegations about the behaviour of senior staff.

Brian McBride, president of the CBI, published an open letter in May outlining failures in its culture. In it he described the board’s response to the allegations as “bewilderment” and that the board and senior leadership team “had believed that the corporate culture of the CBI was in fact strong, and among the very best”.

He went on to say that the challenge of the CBI’s work sometimes “attracts the wrong people” and described a failure of the recruitment process to filter out “culturally toxic people”. This idea is a familiar one to students of the disgraceful banking practices and behaviours that were a feature of the 2007–2009 financial crisis.

The so-called “bad apples” argument refers to the notion that misconduct or unethical behaviour within an organisation is primarily caused by a few individuals who are inherently bad or “toxic” rather than being a systemic issue.

It suggests that by removing these individuals, or managing their behaviour, the organisation can address the problem. While the bad apples argument may have some validity in certain situations where isolated individuals engage in misconduct, it is often an oversimplification and can be misleading for several reasons:

Systemic issues: Misconduct within organisations is often rooted in broader systemic and cultural problems, leadership styles, inadequate policies and flawed processes. Focusing on individual behaviour ignores the underlying organisational factors that contribute to misconduct in the organisation. Context is not neutral – in fact it often contributes to these behaviours so addressing systemic issues is crucial for sustainable change.

Organisational culture: Behaviour shapes culture. If misconduct is permitted by management practices that allow or tolerate unethical behaviour, then this becomes normalised. By attributing misconduct to a few individuals, the broader cultural and environmental factors are often overlooked.

Ethical leadership: The behaviour and actions of leaders have a significant impact on the conduct of individuals within an organisation. Leaders who prioritise ethical behaviour, establish clear values, and lead by example, create an environment that discourages bad behaviour. Ignoring the influence of leadership and attributing misconduct solely to individual employees overlooks the importance of ethical leadership in shaping organisational conduct.

Group dynamics: Misconduct is often driven by group dynamics, where social pressures or the desire to conform to the behaviour of others can lead otherwise well-intentioned people to engage in unethical actions. The bad apples argument neglects the influence of group dynamics and peer pressure on individual behaviour, and how this leads to ethical fading.
Good risk management should be continually assessing these risks – they are inherent in every organisation and culture, and are materially shaped by the role of leaders.

The CBI has outlined the steps it is now putting in place. These include zero tolerance of sexual harassment and bullying, compulsory training, a chief people officer with access to the board, an independent and confidential whistleblowing channel, and formal mechanisms to examine complaints of misconduct. These are necessary processes and should, self-evidently, be part of every organisation’s risk identification, mitigation and assurance processes.

Brian McBride described the CBI board as “complacent”, with “systems of culture management, harm prevention and eradication [that] were insufficient”. The wide-scale nature of the alleged behaviour and the huge consequences for the CBI of this becoming public suggest this is not just about being unsuccessful at preventing individuals from doing bad things, but a systemic failure of risk management.

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