Where does the beast reside in Lord of the Flies? What is Golding suggesting about human beings?

In the metaphorical sense, the beast resides within each of us. When it is unleashed in most of the children, they act as one, forming a mob. William Golding refers to that destructive urge as "mankind's essential illness" (Chapter 4).
In another way, the beast resides on the island hilltop. The boys have seen an apparition that they cannot identify, and as fear yields to panic, they label it a "beast." Simon stumbles upon the figure and realizes it is a dead man. An aviator, the reader knows, had parachuted out of his crashing plane. He died, however, and his body is tangled in a tree with the limp parachute eerily blowing around him. Simon faces his fear and cuts him down.
Unfortunately, rational explanation has lost its power among the frightened children, who reject Simon's explanation. They impulsively decide that he is the beast and attack him. By releasing the violence within, they collectively become a beast.

Throughout the novel, the boys fear an imaginary "beast." They have numerous discussions in regards to the identity of the "beast" and where it resides on the island. While the older boys on the island try convincing the littluns that the "beast" doesn't exist, only Simon understands the true identity of the "beast." During an assembly, Ralph, Jack, and Piggy attempt to convince the littluns that the "beast" doesn't exist. When Simon attempts to give his insight on the matter, he cannot seem to find the words to express his thoughts. Golding writes, "Simon became inarticulate in his effort to express mankind’s essential illness" (126). Through Simon's interpretation, Golding suggests the "beast" is actually mankind's inherent evil. Golding believed all humans are inherently wicked and the only thing that prevents individuals from acting on their primitive instincts is structured society. In his novel, the boys gradually descend into savagery because there are no rules and regulations to prevent them from harming one another. According to William Golding, the “beast” essentially resides in a person’s soul.