Matt Levine frequently discusses the fact that losing billions of dollars means at some point, someone trusted you with billions of dollars. Which new employers (especially banks) look on favorably.
In particular, because the people are management who don’t lose anything when investors get wiped out. The solution is clawing back money that execs paid themselves with these embezzled (on a risk-adjusted perspective) funds.
You can apply the same thing to people management. Who cares if you're a shit manager, if you've managed 100 people that's still going to be looked upon more favourably than someone who's managed 20 people really well for a 100 person management position.
Applying it to execs is probably a simpler comparison. Shit exec means you were still an exec, so you can probably get hired somewhere else as an exec.