I agree with the OP.
When you are CEO of a business, if a key department head or division chief is failing, everything that happens is on you.
Just picture this: Imagine Microsoft's Head of Software development was doing a poor job. Do you think the Microsoft Board would let the situation drift?
The main skill a CEO is expected to have is judgement. Most CEOs are not qualified to run every aspect of their business. Some are but a lot of them are not. They can be CEO of one type of company one minute, leave and become CEO of a completely different type of company the next. However, what they're meant to be able to do is lead, evaluate situations, make decisions.
When Arnold came into his job he could've looked at Murtough's CV, looked at the past eight years that Murtough had supported Woodward for and said: 'Sorry John, given where we are I think this job is too big for you. I'm either going to need to hire someone above you or need you to leave.'
You see this in a lot of companies. A new CEO will get appointed and there will be a corporate bloodbath. People will get fired, people will get replaced, new positions will be created, internal reorganisations will happen.
Arnold chose not to change course. He allowed the failing structure to continue more or less as is. We got a couple of token firings but that's all that's changed.
Arnold might not be a football expert but he should have the judgement to know United needed one heading their recruitment this summer. If he felt Murtough was expert enough that says a lot about his decision making. No amount of rounds down his local is going to change that.