>>The big no no, i think, is in places where there is a direct management line not just a senior / junior sort of relationship
From an HR point of view it has to be separate enough that neither can affect the others job, career,performance, salary, reviews etc. etc.
From a Finance point of view it has to be separate enough that neither can benefit from the authority of the other.
From a Legal point of view it has to be separate enough that nobody can allege any wrong doing, or any negative implications, discomfort or impact.
Usually it's just easier to say no.
Remember, no company ever wants to find out, it is absolutely not to their advantage to do so. They just want to show that they took all reasonable steps and couldn't be expected to know.
Hence in this case I expect that somebody did something silly which forced the company to officially know.
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