Hugh,
I agree with you, In a Perfect world, however that's not how things really happen in the Real World.
The reality is that most executives don't want to know all the details, nuts and bolts of the operation. They hire or appoint people they trust to do that for them... However, in very large organizations, the "Span of Control" is diluted at each step downward. At various points, many employees do not want to admit they screwed up so they lie or try to cover up the mistake. That is what insulates the CEO or President from legal blame, although he is still responsible for what happens on his watch.
In the end, some lower level manager or director is fired or deliberately falls on his sword, admits his error and resigns... sacrificing himself for the President or CEO.
Presidents and CEO's rarely state that they want employees to deliberately break the law. The simply make a strong statement as to what they want done...It is usually the underlings who decide they must break the law to accomplish that task...and they are who takes the blame for his actions and acts to insulate the President or CEO who can truthfully say that he did not order anyone to break the law and had no knowledge that it happened.
In the case of President Richard Nixon, he did not order the breaking at the Watergate hotel, but when he found out it was some of his staff who ordered it, he tried to cover it up. He was about to be impeached for the cover-up when he resigned. When they informed Nixon about the details of the Watergate Break-in, they removed his only shield, and left him hanging out there naked. His only choice was to try to cover it up, or turn in those members of his staff that were involved...He chose to lie and try to cover up the incident.
...Rich