> By your logic, a psychopath CEO may deliberately undermine safety culture to earn more profits and still won't be held responsible, because it's “limited liability”.

Yep. This is how it is generally done. Shareholder's in Boeing are literally responsible for installing "a psycopath CEO" who undermined safety and they aren't liable. I see little difference between that and extending the protection to the CEO as well. It gets better results because we don't chase risk-averse people out of the CEO position. In this situation, we WANT the most risk-averse people we can find in the CEO seat of the airline manufacturers. They won't take it if the response to a crisis is making the position more risky.

There is an argument that the CEO should be liable if it leads to more productive results. But I don't see why that would be true - it is more effective to adjust the profitability of the company when things go wrong and let the incentives do the rest. The default position is that doing your job poorly is not criminal.

Also; most CEOs are psycopaths. You don't need to include it as an adjective. It is built in to the title.