Poll: Outside Business Activity

Based on the most helpful WSO content, here’s an analysis of the situation:

1. Breach of Duties and Incompatibility of the Outside Business Activity (OBA)

• Breach of Duties: Yes, this appears to be a breach of duties to the employer. The employee:

  • Delegated most or all of his investment analysis work to a junior colleague, which suggests neglect of his primary responsibilities.
  • Failed to meet the company’s requirement of being in the office 60% of the time, attending only 20 days over a significant period.
  • Engaged in an outside business activity (OBA) that likely diverted his focus and time away from his core role.

• Incompatibility of OBA: The OBA seems incompatible with his role as a Director in the Real Estate team:

  • The research on residential solar panels is unrelated to his primary job responsibilities.
  • The significant grant (£200k) and the nature of the research suggest a substantial time commitment, which could conflict with his obligations to his employer.

2. Oversight and Monitoring by the Company

• Failure to Oversee: The company appears to have failed in adequately overseeing or monitoring the employee’s OBA:
  • The employee’s prolonged absence from the office (only 20 days in total) should have raised red flags.
  • The company should have had mechanisms in place to ensure compliance with its policies, including the 60% in-office requirement and disclosure of OBAs.
  • A lack of proactive monitoring allowed the employee to pass off his responsibilities to a junior colleague without accountability.

Key Takeaway

This situation highlights the importance of clear policies on OBAs, robust monitoring systems, and regular performance reviews to ensure employees fulfill their duties and avoid conflicts of interest.

Sources: What are vacations like in IB/CB/Corp Dev, Caught interviewing and asked to leave, Downfall of RE, Advice for New Analysts Seeking PE Exits, WFH Should be the Default in IB