Every CEO dreams of building a high-performing leadership team. One that drives growth, executes strategy, and supports the company’s vision. But what happens when the biggest barrier to success isn’t external competition or market forces? What if the problem is the very people sitting at your leadership table?

A toxic leadership team doesn’t just make meetings unbearable. Instead, it actively sabotages business performance. These toxic executives fail to take action on strategic decisions and undermine initiatives. As a result, they create a slow-moving disaster. Worse still, if they are also shareholders, business partners, or long-term employees, the CEO’s ability to act decisively can feel impossible.

The High Cost of a Toxic Leadership Team

Toxic leadership behaviours have serious business consequences:

• Toxic leadership team dysfunction stunts business growth. Internal leadership conflicts are a key reason businesses struggle to scale (Health Psychology Research). A study found that nearly 65% of teams avoid difficult conversations. Consequently, this leads to stalled decisions and missed opportunities.
• Toxic work environments drive talent away. Companies with unhealthy leadership cultures experience 48.4% higher turnover (MIT Sloan Management Review). Compared to companies with strong, aligned leadership, this costs businesses more in hiring expenses, lost productivity, and institutional knowledge.
• Toxic executives lead to CEO burnout. A 2024 workplace empathy study found that 52% of CEOs (Businessolver) described their work environment as toxic. Over 55% reported significant mental health struggles. Furthermore, female CEOs face even greater resistance. Research shows they are 45% more likely to be forced out than male CEOs, even when company performance is strong.

For more insight into the challenges female CEOs face in leadership, read our blog The Journey of a New Female CEO.

Toxic Leadership Behaviours That Kill Business Momentum

Toxic leadership behaviours don’t always appear as outright hostility. Instead, they often hide in subtle but equally damaging ways:

• Excuses, excuses, excuses. Toxic executives agree to strategic initiatives but never follow through. They claim they’re “too busy with client work.” Meanwhile, the rest of the team remains underutilised, waiting for leadership to clear the bottlenecks.
• Undermining decisions. Instead of engaging in discussions during leadership meetings, they refuse to give feedback. Then, at the last minute, they challenge the decision, which creates chaos and indecision.
• Sabotaging accountability. When challenged, they push back against external advisors. They dismiss strategic planning efforts and resist attempts to hold them accountable.
• Building secret alliances. They meet behind closed doors, fostering leadership team conflict. As a result, they quietly challenge the CEO’s authority instead of working toward shared goals.

How to Regain Control and Fix a Toxic Leadership Team

If you’re facing toxic leadership behaviour, take action now. Here’s how:

1. Tie financial incentives to strategic execution. If toxic leaders are shareholders, their financial rewards must link to execution, not just revenue. Therefore, make strategic follow-through a non-negotiable part of compensation.
2. Codify expectations in shareholder agreements and executive contracts. A strong shareholder agreement should outline leadership expectations, decision-making authority, and consequences for failing to deliver. Without this, toxic executives will continue playing politics instead of driving results.
3. Use governance structures to enforce accountability. Make strategy execution a formal governance issue. Require quarterly updates. Assign deliverables with deadlines. Additionally, hold leadership meetings that document commitments. If leaders ignore responsibilities, escalate to the board or shareholders.
4. Leverage external advisors for oversight. If toxic executives resist external guidance, make strategic facilitation a governance requirement. CEOs often struggle alone. Therefore, bring in expert voices to provide objective clarity.
5. Remove or neutralise toxic influences. If toxic leaders refuse to change, and governance tools fail, restructure their roles or buy them out. CEOs often delay these decisions out of fear. However, the longer dysfunction lingers, the more damage it does. Uber, WeWork, and others learned this lesson the hard way (Harvard Business Review). Don’t let your company be next.

Final Thought: Leadership is a Team Sport

Great companies aren’t built by lone CEOs fighting against their own leadership teams. Instead, they thrive when executives are aligned, accountable, and focused on business growth. If your leadership team is dysfunctional, confront it head-on. The cost of inaction is too high.

Want to discuss strategies for dealing with a toxic leadership team? Let’s talk.