All you’ve got to do is say you were a lone wolf.”
This is what ex News of the World former royal editor Clive Goodman said he was told by Andy Coulson, one of those involved in the hacking scandal.
The lone wolf defence suggests the mis-behaviour is a rare exception. No wonder PR companies love it and recommend this ruse when helping their clients cope with reputation damage. The single big bad wolf or rotten apple excuse allows them to separate the bad behaviour from any suggestion of the bigger picture. An example is London Met Police where
Each scandal is examined in isolation, treated as the action of rogue officers. But together they suggest an institutionally rotten system.”
O.Jones, Guardian, Sunday 9 March 2014
In early 2014 the operators of two exchanges for the virtual currency Bitcoin were arrested in the US charged with money laundering. After the arrests, Superintendent of Financial Services for New York State, Benjamin Lawsky, said: “There are always going to be bad apples in any industry.” 
A 2009 Deloitte report suggested a small proportion of people are born to be unethical. This group makes a habit of being amoral and never cares about values. They are devoid of conscience and resistant to ethical role models or culture. Companies should therefore assume:
…approximately four per cent of the adult population is toxic.”
In practice around one in twenty five people perhaps operates without a sense of right and wrong. These are the genuine bad apples and represent the potential toxic percentage in any organisation.
Even the best compliance programs cannot always prevent these irresponsible employees from breaking the rules. Regulators know this too; failure to stop the lone wolves or rogue employee does not mean there is a useless compliance programme.
How to sort the Bad Apples
Business leaders must decide how best to protect their organisation from the inevitable rogue employee.
Should we guard against the bad applies landing in our barrel, or focus more on the barrel in which we put the apples?”
One approach assumes most people are bad and cannot be changed or trusted. This implies a need for a tight, controlling environment, one with lots of people doing constant checks on what is happening, with further checks on the checkers.
Or a leader may prefer to assume there is a good person inside each of us; we only need the right influences to guide us to behave well. With the right environment employees become “ethically engaged” and will help and provide early warning about dangerous lone wolf activity.
Both assumptions have important implications for business practice including: Recruitment; Reward; and Culture.
A company needs a rigorous recruitment process to try to identify potential rogue employees with poor values or judgement. Many though, use weak procedures that allow the lone wolves to sneak in.
One of the best ways of preventing this is watching how a potential recruit performs a job under realistic conditions. To see the real person bring them in for a day or two and give them a short task to accomplish—while being paid for their time.
Perhaps the biggest ethical risk in the hiring process is assuming the chances of hiring a bad apple go down, the further up you go in an organisation. But just because someone seems well educated does not mean they represent a lower risk of being toxic.
Too many leaders end up rewarding rather than tackling bad behaviour. The message soon comes across to employees
Better not rock the boat if you see something going wrong.”
Action also includes guiding all employees in what it means to do the right thing. This includes not putting people in situations that increase the chances of unethical behaviour. A humane work scene where people do meaningful work and feel valued will be less likely to harbour a toxic employee for long, compared to a dispiriting place to work.
Misplaced incentives can also prove damaging, encouraging people to mis-behave. Many of the mis-selling scandals of recent years used incentive schemes that sent a clear message to sales people,: bullying or misleading customers will be tolerated.
While a rogue employee may be a fact of life, this becomes ever less credible as an excuse for harmful behaviour. Not only do regulators wonder why a compliance system failed for example, and allowed misconduct to go undetected.
Even more fundamental is the failure of leaders to build the right culture. For example, culture explains why “rogue trader” Nick Leeson in Barings was not stopped early in his tracks. Several employees had tried to warn their bosses about his activities but were ignored. The culture lacked transparency, accountability and a tradition of speaking up.
Where there is excessive pressure to achieve results can be a major reason for triggering unethical behaviour. Leaders should be alert to the risks of allowing the organisational environment to be so demanding that people are almost forced to take short cuts and compromise on decisions, quality and relationships.
Values driven leadership
Two years ago the Pentagon launched an ethics review of its top brass. The then Secretary of Defence was shocked at the improper behaviour of a few high-ranking offices. He wanted to foster “values based” leadership. Later a series of massive scandals led to another study focused on how the military teaches core values and ethical leadership. The aim is to solve two problems: “bad apples” and “bad barrels.”
Too many scandals and lone wolves tell us business leaders must also start tackling the ethics issue in new ways, driven by core values.