I read a lot of negatives on nepotism throughout this forum and needed a sanity check on my opinion on nepotism.
TLDR:
I think nepotism is good. In overall scheme of things good and average at a minimum. There are a few reasons I think this:
Rationale 1:
Nepo hires' parents gained the influence on merit (if things were done illegally, I would hope the the legal system would take care of them).
Case 1 (Nepo hire is bad): Nepo hire's parents effort to improve the status of the family only lasts 1 generation. So the negative influence the nepo hire has would offset all of the achievements the parents have accrued over time.
Case 2 (Nepo hire is average): Nepo hire has no material impact to the team (positive or negative), if anything, it's a bit of a gain to the firm as they may attract more business from the nepo hire's parents.
Case 3 (Nepo hire is good): Win-win
Rationale 2:
I think my thought process goes like this:
- I want to be successful
- I see successful people are normally influential in their field/business/peers
- I want what is best for my children
- If I were successful, I would probably have friends in positions of power as well
- If my kid wanted a shot at a profession, I'd try my best to mold him/her to be good in that profession/gather resources required in the steps to go into that profession/push the kid to do well in school to increase the chance of recruiting
- When the time comes (kid graduates or is recruiting for internships), and if I have friends in the field that my kid wants to work at. It is likely that those friends already know that my kid is interested in their field and reach out OR I reach out and ask if my kid can learn from them.
- I realize, if I gain the successes that I aimed for, I'd probably practice nepotism as needed...
Maybe this isn't a good analogy, but if a shitty nepo hire is bound to ruin his own career with all the shittiness, then nepotism is similar to sending your kid to private school, putting your kid through reputable tutors, etc.
Who you know has always been more important than what you know, and having a dad or a family friend in-industry is the best relationship you can have. You see this in business, in the entertainment industry, in pro sports, etc.
Nepo hires who are morons are easy to make fun of, but as with all things in life, it's a far better use of your time to worry about things you can control vs. things you can't, and the number one thing you can control is yourself and your own efforts.
Nepotism isn't inherently good, but it also isn't going anywhere, so it's best to just get on with life.
This might be me trying to argue for the sake or arguing...but I'm still thinking nepotism is good in overall scheme of things. It compels people like myself to do better so that I can do the same if/when I am in a position to do so. The byproduct of that is that the individual develop one or more skill sets that the market values highly and produce / deliver value adding product / service as they climb up the latter of success / status / influence. If in case you've failed with your child but are still practicing nepotism and thereby cause harm to a team, then you've only done net-neutral in aggregate because in theory, you've done good to get to where you are at but offset that with poor child raising.
Nepotism is the glue that ensures societies survival. It keeps people that are born within a class or caste within that caste or class. Lower peasants should have little to no social mobility. Who deemed you so?
Equality is inherently a false notion. One that brings great pain to society. Revolutions are always based on this notion that society. Should be fair and just. Who sold you that idea? Who told you so? Nature didn't.
By allowing equality you allow massive toxic competition. If every person thought they were capable of getting x then there's no social cohesion in society. That's what you're seeing in college admissions and jobs today. Everyone applying to the top since they can.
In what world can most peasants apply for schools reserved for the aristocracy. Such bullshit never existed in the past. By allowing this it's the equivalent of a black Friday sale were millions rush to compete for a few low priced goods. In doing so you completely destroy social cohesion since it's every person for themselves.
Peasants should remain peasants and be happy. Stop causing pain for the rest of us. Immense pain. Honestly this is the fundamental human problem. People can't be content with what they have. Stay in your fucking lane.
True society arises when there are social hierarchies. Social classes. Social castes. Just like how some humans have better traits for survival. This must be reflected in society. No man is created equal. This is a lie fed by liberalists and the West. The Constitution is wrong. Jefferson is wrong. No man is created equal
Based on the most helpful WSO content, here's a detailed breakdown of opinions on nepotism:
General Sentiment on Nepotism:
Key Points from the Discussions:
Merit vs. Connections:
Parental Influence:
Personal Drive and Motivation:
Merit-Based Hiring:
Conclusion:
While nepotism is a contentious issue, it is deeply ingrained in the finance industry. The key takeaway is to focus on what you can control—your work ethic, networking skills, and personal drive. Despite the challenges, many users find motivation in their circumstances and strive to create better opportunities for themselves and future generations.
Sources: Nepotism pisses me off, Nepotism pisses me off, ,
This is more about the true nepo- the son of the CEO who becomes CEO himself, rather than the guy who gets his foot in the door because his dad knows an MD.
Let me set the scene: I made the observation in my career that the work I needed to be good at early on in order to advance had zero bearing on making me successful late in my career. In my early roles I needed to be an excel wizard- the more I could automate away mistakes, the better. Do you think the CEO or VPs use excel? and when they do- that they're building deep conditional formatting formulas and array index/matches? Made me realize that I needed to hurry through those early roles to get to the later ones so I could start building the skillset that matters.
BUT- I had no guarantees I would advance. So I did have to master excel, did have to master SAP and Oracle, etc. But now I just use excel as a glorified calculator- You could say I wasted many hours learning to do something just to get through the early roles- that I spent years getting through the data crunching roles to get to the more strategic roles where I will finally spend most of my time learning things that will matter.
Now imagine if my last name was on the headquarters building. I go in as a financial analyst 1 with a totally different mindset- the one question in my mind becomes "what do I need to learn from this role that will help me when I'm CEO?" rather than "what do I need to learn to get promoted to Senior Analyst?"
Compare the 55 year old bootstrapped CEO vs the 45 (or even 35) year old nepo CEO. The bootstrapped CEO toiled for 10-15 years in roles where he just had to focus on getting the next promotion. The bootstrapped CEO likely never even heard of the company until he was 22.
The nepo CEO grew up with dinner table conversations about the company- Absorbed his dad's leadership style through osmosis. His whole future relied on the success of the company. All his internships and entire career were crafted around learning what was important in each role to make him a better CEO. His "years of experience" don't start at 22, they start earlier. How many years of experience do you need to be a good CEO? what if those years started at 10 or 15 and not 22? and you moved to the next role once you learned what was needed, rather than losing a year or two here and there waiting for an opening? Being a 35 year old CEO doesn't sound so crazy anymore.
Obviously there are exceptions- the brat son, the druggie son, etc etc etc. Envious types looovvvve to base their entire opinion around the exceptions.
Slightly different topic, but the same goes for aristocracy and monarchy. Imagine if your whole life was spent learning what you needed to learn in order to be the best ruler possible. Your whole life spent feeling the weight of the enormity of the responsibility before you- learning the history of your people, knowing from the inside how your family approached various challenges. Not having to worry about elections, and thus being able to make tough decisions that will be better in the long run (national debt, anyone?). Our egalitarian American minds cannot comprehend the merits of this form of government- we immediately think of the poor peasant who will only ever work the fields, living in relative peace without the incessant pressure to make more of himself, to consume more, to impress his friends.. what a miserable life
I think I can get on board with your view.. sons/daughters inheriting an entire org based on name and the whole growth framework is different from earlier age. I've seen this happen on many occasions. My mindset when posting was kind of the perspective of the 55 year old CEO you mentioned. I'm no where near that, but I'd like to think that I'm working hard and one day become something close to that. And at that point, I'm not a moral person by any means and would probably practice nepotism if possible and if needed. Looking back, my post is seem more like me trying to justify why I would practice nepotism... haha
I would not call nepotism inherently immoral. I think about it in the context of where your duty lies- if you are a public company CEO, your duty is to your shareholders. It very well may be in the interest of your shareholders to craft a leader from adolescence and shepherd them through their career. Or if you are a business owner- you are the shareholder, and by extension your children are the shareholders.
Obviously this doesn't apply when your kid is a fuck-up, but that is most of the time the result of bad parenting. The noise we see from celebrities about how they want their kids to start with nothing is an implicit admission of shitty parenting, that they think some charity will be a better steward of their wealth and resources than a person who they had decades to form.
I'll also say that CEOs like to surround themselves with talent and loyalty. Who is more loyal than your own child? Who better do you know the talents of than your own child? My homeschool friends talk about how since their dad graded their papers, they couldn't pull all nighters or half-ass a paper to get a B. Their dad knew their skills and could tell when a paper had no effort behind it. What we would all give for our boss to thoroughly know our skills, strengths and weaknesses, where we thrive, how we are motivated, etc.
All that to say, I give lots of thought and focus on how to best raise and form my kids, and I100% intend to be a stepping stool for them to be greater than I- in intellect, morals, influence, and means.
-1 MS. You're talking about leadership and managment like it's something you can learn from a book or conversation.
What you describe above makes absolutely terrible leaders. Part of what makes a good leader is knowing how your organization works from the trenches to the highest level and you don't get those perspectives without being in the trenches. What you're describing is the type of leader who has read about great battles and is ready to order a charge but has never fired a gun himself and has never charged enemy trenches with his own head on the line. Those types of leaders are pure dogshit and they get people killed and destroy value at companies.
No- I explicitly said that the leader gets moved through various roles:
Most public family company CEOs do this- send the heir in at an entry level, have them work jobs of increasing responsibility. They spend time in the trenches but not any more time than needed.
Think of your first few roles. How much time did you need to spend in those roles to "get it" and learn the things that you'd need later? In my experience- a year, two tops. The rest of the time was spent waiting to hit a certain number of years of experience to get promoted, or waiting for an opening, or getting even better at excel so I could get promoted
Not a fan of William T Sherman I see
Interesting perspective. I feel like this takes a combination of good father skills and good leadership skills to mold the son/daughter into an effective CEO.
This only works if the parent is a good judge of whether their child is actually a net gain for the company and not just mindlessly pushing them to some success so that they can save face around friends that their kid isn't dumb.
Thus nepotism is bad when you do it because I don't trust your ability to judge your children objectively. However, I am very good at judging my children and thus nepotism is good when I do it.
I only think of nepotism in these terms: does the kid deserve it? If so, by all means give them the whole company and your entire estate for all I care. If not, you’re a stupid parent if you still want to give your kid a free job and risk embarrassing yourself, putting the favoritism and robbing opportunities from others aside.
What is the proof for your claim that "Nepo hires' parents gained the influence on merit?"
To be very clear, I am not asking for evidence. We will get there. I am asking a more fundamental question of providing the full chain of logic that permits this to be the case.
I don't have a proof or data to support that claim. It's a hypothetical (maybe biased) premise I've built my argument around. I've also mentioned that if the influence was gained illegally, than I'd hope that the legal system would / would have sorted it out.
To be honest, I don't know ANY of nepo hires' parents but my guess is, they are successful / influential to a degree high enough to influence the outcome of a certain recruiting process. So like nepo's dad is a doctor, and neighbor's dad is GS director... or nepo's dad is a PM in a massive LO firm and has contacts in BB brokerage arms...
(1) A few preliminary points.
We are in agreement that, for this conversation, we are ignoring anything illegal. Clearly that is reasonable enough.
I am not taking issue with your conclusion. I am not saying anything about whether or not that is a valid/good one. I am just taking a more specific look at one of your specific premises you are using to get to your conclusion.
(2) There is a reason why I am focusing on this specific premise. If you follow your Case 1 all the way through, your Case 1 demonstrates how it is not necessarily always true. Which means this would only be a special case of a more general concept.
There is nothing wrong with this. Einstein started with Special Theory before he got around to General Relativity nearly a decade later. We just have to acknowledge this. That's the entire point I am trying to make here
[the lack of being able to delete a post is insane to me]
It can work in theory. Theoretically, nepo kid gets hired because those relationships benefit the firm even more than his deficiencies cost the firm.
But in reality I don't think that's often the case.
What I tend to see in reality is, the nepo kid brings relationship capital that is important only to one senior person and that doesn't really accrue to the firm at large. Example is MD hires his client's kid, which builds personal capital between that individual MD and that individual at the client firm . . this isn't really Morgan Stanley strengthening its relationship with General Motors, it's one dude at MS building personal loyalty with his one contact at GM. When the MD leaves for another firm that personal relationship goes with him. Furthermore if another MD at Morgan Stanley has better connections to GM, then that becomes the firm-to-firm connection and the first MD's personal relationship didn't mean squat for MS.
But the costs of having nepo kids hurting work & culture gets felt across the firm. So even if it can work in some situations, to me its usually about one person abusing the firm apparatus for benefit that's mostly his own.
Your take makes sense to me. Thank you!
This is the real problem. It ends when you realize that your job as a parent isn't to ensure that your kid is upper middle class with a BMW but rather that your job as a parent is to help them become good and decent people. In my case that involves teaching my kids about Jesus among other things.
When you stop looking at child-raising as a wealth maximization excerise for the next generation, that's when the nepotism ends. It's not actually about the kid. It's about where you are in your values and what is important to you in the world.
In additon, you also start realizing that struggling to get somewhere has value in of itself from a spiritual perspective and you don't want to deprive your children of that perspective.
Do you believe your worldview and values are superior?
If no, why do you hold those values and worldview?
If yes, would you not seek to inculcate those values into your children and the people around you?
If you are successful in this task, and your children share your values, would you not seek to give them tools to spread those values? What better tools are there than wealth and influence?
The below post gives more depth, and from a Christian perspective:
The rich should leave their wealth to their children, not to charity (substack.com)
I encourage you to read it with an open mind. Here is the most directly applicable part: "In fact, what is often happening is that bad celebrity parents are attempting to outsource the cultivation of the virtues of discipline and ambition to the job market, rather than succeeding in inculcating these virtues as a parent. The false virtue of ‘work-for-work’s-sake’ is an attempt at mitigating bad parenting."
Yes, I do think that my values are superior. That's why I believe in them.
And wealth is not the tool to spread values. The values are the tools to spread the values.
I look at the lives of the saints and I don't see millionaires who use their wealth to spread the word. I see people with absolutely nothing achieving amazing things with their faith in God. We worship a Savior who was literally born in a manger among animals and filth. He did not choose to be born the son of a king. Think about the significance of that, especially in relation to this conversation.
(1) "Do you believe your worldview and values are superior?"
Doesn't this assume an exclusive nature to the quality of worldviews? That there can only be one best worldview/set-of-values? If that is what you are saying, that is not necessarily true.
(2) "If yes, would you not seek to inculcate those values into your children and the people around you... than wealth and influence?"
What evidence is there that turning one's kids into nepo babies gives them the tools to spread those values? Even if I grant you the relevance of this, which I am not necessarily doing, what is the evidence that this happens in the real world? Are you saying this is how (edit: nepo) babies always work? How nepo babies work 50% of the time?
It is fine to have theories. But a theory's only usefulness is in being able to describe the real world that actually exists. So, before even getting into whether this is good or not (and its relevance), we must first tie your vibes to actual reality. Otherwise, that entire (edit: bit) you did is meaningless.
(edit made to correct my piss-poor spelling)
I don't particularly agree with your view. I'm a Catholic but not too religious, as you might imagine. I prefer the story of working hard and contributing to the world betterment through productivity and having skill sets that the world values rather than do nothing productive and use the name of God to ask for money. If the byproduct is wealth, even better. If done honestly and legally, striving to be successful in and of itself valuable and one seeks to find things to do or make that other people value and in return be compensated.
In the context of nepotism, should you have friends who are influential in a field that your kid is passionate about, and your friend offers a helping hand, would you go out of your way to stop that? Just to shove some difficulties down your kids throat? I hope to raise my kids in the best way possible probably just like you. My approval of nepotism doesn't necessarily equate to my view of having children as mere venue for wealth maximization.
I certainly think that it is a noble and good thing to have a productive career and participate in society. Jesus himself was a carpenter. I'm sure that He and Joseph charged people for their services.
However, I think that it's just like anything else in the Bible, acceptable with moderation and the right perspective. Eating food but there is also gluttony. Drinking wine as Jesus did but there is also drunkeness. In the same sense, there is a point where a productive career becomes excess and greed.
Also, it goes a little beyond whether I agree with it or not. It's in the Bible and it's written in a pretty clear cut way. I just can't read the verse about the eye of the needle or the poor widow and pretend that it doesn't say what it clearly says. And there are others as well....I mean we are basically repeating the conversation in Matthew 19:16 right now:
Look, I get it. My life as a financial professional would be a lot simpler if these verses did not exist, but they do and you can't ignore them. I feel like on this forum we are struggling with that last sentence or trying to wrestle some sort of compromise like I give some of my money, or I employ some people, but I still get to drive my Ferrari. And what I think you're struggling with is the values of the world versus what the Bible actually says. If you're a guy who earned $100 million bucks and you donated $5 million, the world will tell you that you're such a great guy. Buildings will be named after you, scholarships named after you, you will speak at charity events, etc. etc. That's the standards of the world. What the Bible is saying is that much more is wanted from the wealthy than that. Luke 12:48:
Alexander of Macedon was the biggest nepo baby of all time!
Yes. He is a nepo baby but being a nepo baby can be okay when you are as OP as Alexander. When you turn islands into peninsulas, it is okay to base your power off your daddy
Thank God nepotism exists then I guess
The biggest idiots in every industry are the boomer nepo types that benefitted massively from previous social structure.
Fairly neutral. Was a nepo hire at my first job and I managed nepos in the past. Both times, we were both at least average at our job descriptions.
indifferent
nepotism is a sneaky way of bribery. Firm cannot bribe a government official or a company executive, so they just hire their sons at a high price.
LOL this is why no one takes the anti-DEI crying circle on here seriously outside of the hardo echo chamber that's formed on WSO - regardless of one's opinions on DEI and all that stuff, it's a peak caricature to read a post which by definition is explaining that less meritocracy is good get so much love, nested between an endless stream of posts about DEI Beckies or whatever. I guess fairness to many is just about whether they and people they like are successful, and nothing to do with 'unfairness'...
Yep. Anyone who has ever complained about diversity hires, without first complaining about nepo hires, is both clearly someone who is salty that their connections aren't guaranteeing them a job, and also a bigot.
You/we should be quite open about labeling these people appropriately.
This is garbage cope. I've seen firms where entire analyst and associate classes get screwed because a nepo baby isn't pulling their weight. In these cases, good, meritocratically hired folks suffer and they can't say anything for fear of getting fired.
Nepotism is never a good thing and those on here promoting it are likely nepo babies themselves, promoting their own propaganda.
I thought this was America.
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