I've seen a few 'old boys clubs' form, and the conclusion I've come to over time is that a large part of this is due to two characteristics. The first is that it's very hard to find credible talent. Think about the people you've worked with - there's probably 100+ or so of them, yes? Now think of how many of them you think are really exceptionally good. Probably only a few, even amongst people with the same role, and it likely took you quite a while to realise that. So, when you come to hire someone, you look at your network, because you've worked with a lot of people, and have opinions on who is and is not good. You simply have more information. The second is that once in a more senior role, it's much harder to judge whether a peer is doing a good job or not, because you don't see a lot of their work and you're likely more reliant on self reported state of world. That tends to weaken your decision making ability on the above, while heightening the importance of doing it correctly. Neither of those things are excuses, but they're certainly reasons. I think it's relatively straightforward to find incompetent executives who've wasted money and who are known for this.