When the CEO Is the Toxic Employee

In most small businesses, culture starts, and ends, with the CEO.

Their behavior sets the tone for everything that follows: how feedback is handled, how people communicate, and how conflict is resolved. But what happens when the person at the top is the problem?

When the CEO is the toxic employee, the playbook for managing culture breaks down. You can’t coach up. You can’t escalate. And you can’t “HR your way” out of it. What you can do is understand the dynamics at play and protect yourself and your credibility while you decide whether to stay in the game.

So let’s talk a little bit about the signs and what you can do. 

Recognize What You’re Up Against

Toxic CEOs rarely see themselves as the issue.

They see themselves as “visionary,” “direct,” or “passionate.” The behaviors they frame as strength, like micromanaging, public criticism, and emotional volatility, become normalized through fear and silence.

The longer this goes unchecked, the more the organization reorganizes itself around protecting the CEO’s ego rather than driving results.

You know you’re in this territory when:

• Team members are hesitant to make decisions without the CEO’s approval.

• Honest feedback is treated as disloyalty.

• Turnover is explained away as “bad fits” instead of warning signs.

Acknowledging that you’re not dealing with a difficult personality but a cultural contagion changes how you strategize.

Protect Your Credibility and Your Energy

As HR, your credibility is your currency. Once the CEO sees you as “against” them, your influence evaporates. So your first priority is to stay anchored in data, not emotion.

• Track patterns, not incidents. Is turnover spiking under one department? Are engagement scores dropping after certain meetings?

• Use business language. Talk about risk exposure, cost of attrition, and impact on productivity, not “toxic behavior.”

• Stay neutral in tone, consistent in principle. You’re not the CEO’s therapist, but you are the organization’s conscience.

And protect your energy. Toxic CEOs drain through proximity: constant reactivity, boundary testing, and performative chaos. Create space between their urgency and your wellbeing. You can’t advocate for employees if you’re running on fumes.

Build Quiet Alliances

In toxic environments, your allies matter more than your title.

Middle managers and peer leaders often see what’s happening but don’t know how to act. Build trust with those who still want the business to succeed. Share data selectively. Coach them on how to frame feedback upward. Help them build micro-cultures of safety inside their teams.

These alliances not only buffer employees from harm, they become your credibility network when it’s time to make hard calls or present patterns to the board (if one exists).

Know When It’s Time to Leave

There’s a point where influence turns into enablement.

If the CEO’s behavior is eroding trust faster than you can rebuild it and they refuse to take accountability, staying becomes a form of self-betrayal. The longer you remain in a toxic system, the more it rewires your tolerance for dysfunction.

The best HR professionals I know didn’t become experts by fixing every culture. They became experts by knowing when to walk away, and taking their integrity with them.

Leading through the unfixable is one of HR’s greatest tests. Not because you can’t see what’s broken, but because you have to decide when fixing it isn’t your job anymore. You can’t fix people who don’t want to change. But you can maintain your professionalism, protect your credibility, and use your insight to influence what’s within reach. Sometimes the greatest impact you make is modeling what healthy leadership looks like, even when the CEO doesn’t.

Toxic CEOs don’t just damage businesses.

They damage the people trying to hold those businesses together.

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