This is true.
And this can work in lots of different ways. The exact reason that a person "gets caught" doing something improper or admits to it is unique to each case.
But in leadership circles, it's definitely connected to the fact that people who have stuff like this to hide can be pushed around and manipulated more easily for political reasons (yes, politics exists in business, too!).
In the case of upper-level executives, the reports I have read indicate that there is a certain amount of culling that takes place as one attempts to move up the ranks, and one thing being looked for these days is lax sexual morals. To the extent that this is true, we have an entire power system that has been corrupted.
It is not impossible to be morally sound and also be in command. But the game has not been played that way. And there has been no human technology (psychology) capable of creating such a game, until relatively recently. On top of that we have the fact that power will always attract crime. Always. So the powerful have to be vigilant or they will, more than likely, succumb to criminal pressures. This in not a light subject. The ultimate fate of the planet depends on solving this.