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What's the point of making it to the top if you can't bring your friends and family along for the ride?
Same as any referral - someone who knows the candidate can vouche for their character, work ethic, and capabilities. The more senior the person referring, the more seriously it is take - just like all other referrals. Bonus points that if their kid performs poorly it reflects poorly on them - so you have someone who knows the job incentivised to make sure they don't suck (in theory)
Also there is definitely an implicit quid pro quo favor system
I guess it depends on what is meant by good for business. Nepotism is a way of holding on to power and influence, and it instills loyalty. Over time that can be effective in some organizations. But there's an argument to be made that nepotism and favoritism ultimately diminish an organization.
I forgot where, but someone asked on fishbowl recently “what would be the best last interview question you could be asked?” And the top answer was: “So, are you and your dad still on for a round of golf on Saturday?”
And when you think about it, how it could it get any better than that? That kind of question means you’re well connected, already well off, you guy interviewing you, I could go on.
I’m not well connected, but the thought of being so sounds nice.
It’s all about who you know. At the end of day investment banking is a relationship business, the more relationships you built the higher likelihood of you moving up in the food chain