A person with poor values and morals can damage your culture and cause people to believe something about your company that isn’t true. Someone who is willing to do things that are illegal or immoral can give others the perception that these things are condoned—even when they are not.
If you allow someone to act outside of what you profess to be your beliefs and values, you are in a sense condoning their value systems through an unwillingness to confront their poor behavior or prevent it once it has come to light. The longer a person (or persons) are allowed to continue to do things that conflict with your cultural values, the more they diminish your values—and your moral authority.
If someone on your team is willing to lie or mislead a client, for that client, the person who lied is a representation of your organizations cultural values. Even if this is not true. And even if this is not fair. If there are no consequences for their behavior, acceptance is the same as condoning the behavior.
If someone on your team is willing to accept money that doesn’t belong to them, then your clients—and your employees—will see evidence that the cultural values of your company are ones that allow for theft. If the person who has violated your values is left in their position without repercussions, their behavior has been accepted.
Leaders who mistreat their employees, using force instead of inspiration and influence, leaning on a dominator hierarchy instead of a growth hierarchy (the first being positional authority, the latter being an other-oriented, moral authority), that behavior is indicative of the leadership team—even if it is nothing close to universally true.
The worst behavior, when condoned or accepted, is how you lose your company’s cultural values. Unless you do something.