Before I get to this, how many people make love to their spouses in public (it's illegal in PA, BTW)? I can understand Sandusky not doing what he did in public, as much as I can understand why he never made love to Dottie on the fifty yard line during half time.
Paterno, if you want to make that corporate analogy, was a department head. He was a very important department head, but he was not the CEO. The department he headed was profitable, but it didn't have the training to investigate.
What would a department head do, if he heard from a junior employee, that something happened involving a former employee. Call the department that investigates it. Not hire private detectives, not attempt to investigate himself, but take it to the department that does investigate these things.
That's key (though not the way you made that point). Paterno, as this department head, did have an administrative responsibility to protect the brand. He should have, after that investigation, gone back and said, in effect, is there there anything in that could damage this brand, and have you done enough to protect the brand. That is where I will fault him, and I'm not sure that he would have gotten an honest answer.