No. I am saying that the CTO is responsible for knowing what is going on in his/her departments, full stop. "Knew or should have known". If the CTO doesn't know, it's the CTO's fault for not knowing, because it's the CTO's job to know.

Now, if you have one employee go off the rails, it's not the CTO's fault for knowing in advance that the one employee had problems. But a department-wide issue? Yeah, it's the CTO's job.