The chair of the verifier/practitioner committee (currently held by Carl Bacon, CIPM) for the GIPS(R) (Global Investment Performance Standards) Executive Committee is up, and nominations are being sought. And so, if you think you’d like to serve, let them know!
Who serves on the EC is very important, as it influences the direction of the Standards.
I was fortunate to be a member of the EC’s predecessor group, the Investment Performance Council. I recall being approached by another American member the evening before a critical meeting, who told me flat out that “we lost“: that mandatory verification was going to go through.
Just a bit of background: at that time we were working on the 2005 edition of the Standards, and the IPC was addressing whether or not mandatory verification should become the rule. I, as well as virtually all American members of the IPC, along with a few others, opposed mandatory verification. But here I was being informed that it was going to become a reality.
Later that evening I was approached by two other members of the IPC who asked me “what would it take for me to support mandatory verification?” My reply? Nothing; it wouldn’t happen! I knew how important it was for verification to remain a recommendation, and I fully and strongly opposed this change. I was (to borrow a favorite George W. Bush term) resolute in my position. Let me be clear: it wasn’t just my view, as that has minimal importance; it was the view of most of the people I represented on the IPC. I knew this was a critically important matter, and couldn’t agree with the change.
The following day, this topic was brought up, and one of the gentlemen who approached me the prior evening suggested to the members that we alter direction regarding this matter, and after a long but cordial discussion, the IPC agreed to drop the idea entirely! And when the question of the shift from ten to five years of history was brought up, I was asked if the Americans would support this, and I said “of course,” given that the members were willing to agree to drop mandatory verification.
And so, it matters a great deal who is on the EC. Differing opinions should be sought, desired, respected, and honored. Yes, members must be willing to compromise and seek common ground. But the failure to hold strong to important matters benefits no one.
Consider the change to the carve-out rules (i.e., eliminating the ability for compliant firms to allocate cash to the carved out sectors and requiring firms to manage the cash separately). The IPC had planned to introduce this change in 2005; however, in the crafting of the 2005 edition, given the overwhelming opposition to the change (that is, to eliminate the ability to allocate cash), it was pushed back. Unfortunately, we weren’t given another chance to comment. Why not? This was, and still is, an important topic. Since I wasn’t in any of these meetings, I do not know how this was addressed. But I do know that a large number of firms opposed this change.
And so it matters who serves on the EC. Hope you agree.
p.s., If you’re wondering if I will be applying, I will. Wish me luck!