I feel like you're selling it short here. He said "If you would be shocked and horrified if Company X hired several of your employees then you should not hire from them. This should be a very small list and require CEO sign off before happening" At the macro level what he's saying is you have to protect the overall health of your company. If one or two key hires from a competitor result in poisoning the inter company relationships then the negative outweighs the positive so don't do it. Or, at the very least, understand that your internal argument "well that employee was looking so they were lost anyways someone was going to get them" can create a much bigger problem for you down the road (if new employee X enjoys your company chances are she'll tell her friends at old company and HR will see inbound flow and create an unintended "raiding" scenario)

I think he's guilty of trying to overly engineer management here and don't agree but he does have a logic around a really narrow use case.