You bring up a solid paradox which occurs in Investing, unfortunately quite often in India.
Peter Lynch famously said that, “You should invest in a business that even a fool can run, because someday a fool will.” Meaning emphasis should be laid on the business fundamentals of a company.
Pat Dorsey also suggests that its better to '"Bet on the Horse and not the Jockey", again reinforcing business moats and soundness.
But remember, Peter Lynch & Pat Dorsey were in US and not India, where corporate governance and their consequences are not taken seriously as of now.
A case in point can be Tree House where the business was simple, had tail winds, ample growth, reasonable moat and showed strong numbers, but went down the drain because the "key to that safe rested with a thug!". People who remained invested for 'business reasons' ended up burning their fingers.
While driving on US roads, people maintain lanes, don't honk unnecessarily and drive at 80-100 kmph. Applying the same driving tactics in India might prove to be a disaster! (I have first hand experience and end up adapting my driving skills to suit Indian traffic.)
A similar lesson can be applicable to Investing tactics coming from US Investors. I have learned it the hard way, that we cannot simple copy past all the tenets applied in US, when investing in India since the landscape is different. They need slight tweaking, especially while investing in smaller firms.
So, a portion of my thinking is leaning towards exiting businesses when there is reasonable confirmation of management malpractice, even if it is a good business. The difficulty here is identifying "reasonable confirmation of management malpractice." and doing it before its too late!