I think it's possible to set things up so that leaders of the companies are shielded from the knowledge on purpose. GM notoriously set up their lawsuit handling

I think it's possible to set things up so that leaders of the companies are shielded from the knowledge on purpose. GM notoriously set up their lawsuit handling legal unit to shield knowledge of problems, among other things with the ignition switch [0]. This was a very specifically organized system where they tried to keep the knowledge of agreements on lawsuits from being visible up the chain - it was no accident. So big companies can and will do this when it suits them. I think this was clearly unethical, but I suspect it's common. 0: http://www.abajournal.com/news/article/attorneys_fired_by_gm_after_law_firm_ignition-switch_probe_are_reporte1/ http://www.abajournal.com/news/article/attorneys_fired_by_gm...