There's a huge, insurmountable void between "I don't understand all the code" and "nobody understands all the code", but you seem to think they are the same thing.
In your case, it's OK that you don't understand all the code because another employee who either produced or reviewed the code does. The company, as a whole, still has the understanding, albeit distributed among multiple employees.
The question is talking about the situation when nobody has the understanding. Understanding implies responsibility.
Compare this to eg. radiology department of a hospital. It has multiple radiologists, they read different images from different patients. They don't know much about the work of their colleagues unless they happen to share some of it. The head of the radiology department is still responsible for reviewing their work, but he or she, obviously, can't review all of it because of the time constraints. The system is designed to share the responsibility and the blame for mistakes. If a patient is misdiagnosed and harm results from the error, they may come back and sue the hospital. The investigation then will have to decide whether the head of the department did a decent job assessing other radiologists working in the department, and based on that assessment he or she may be also found guilty of the error. There's no universal answer here, but the idea is that the head of the department should put a reasonable effort into preventing such errors.
I can't see how software development is different in the sense of sharing responsibility. If you are a head of a department, you should be putting a reasonable effort towards ensuring product quality (and therefore understanding of the codebase). How is it determined? -- By independent industry experts, perhaps such experts would organize in some kind of advisory body that publishes best practices for managing the code writing process which explain the expectations and obligations resting on the shoulders of managers. What percentage of code written by the underlings is reasonable to review? How many underlings can serve under one manager? What is a reasonable amount of code produced by a single person? -- We don't have answers to these questions now, but I believe that we need them, and that the regulators will, eventually, start to demand that we have these or similar metrics, or else we would not be allowed to do our jobs.