"Moral perfection" in company culture

I was at an event recently where a CEO was sharing the idea that "the new generation of employees" (not defined, but implied to be those on the younger side) expects managers, role models at a company and the culture to be "morally perfect". His point was that it was very difficult to be honest about tradeoffs and the way in which a business is not a non-profit and/or even hold up other companies' or individuals' successes if they are not considered "perfect" in every way. A specific example is Elon Musk and how while being a controversial figure, he has accomplished a lot but it was not ok to talk about him or his strategies because younger employees at the company viewed him as so flawed in some ways that he could not be raised as a role model with respect to his other achievements. I'm curious whether other managers have encountered this and what their view is.