You may recall President Clinton’s statement that “it depends on what you mean by the word, ‘is.'” I think Clinton made a good point, and I often find myself citing this line, as I think it has extensive relevance, given many words’ or phrases’ varied meanings. Knowing what is meant is key to understanding.
I recently opined on the Q&A-based allowance for GIPS(R) (Global Investment Performance Standards) compliant firms to remove certain disclosures from their presentations, if they are no longer meaningful or relevant. Coincidentally, we’ve recently seen in the press (e.g., in today’s WSJ, in an article by Valentino-DeVries and Gorman, titled “Secret Court Ruling Expanded Spy Powers”) the U.S. National Security Agency’s expansion of getting phone records of its citizens, by redefining what the word “relevant” means.
While we might expect GIPS compliant firms to narrow its meaning, so as to avoid continuing the disclosure of certain information in their composite presentations (e.g., composite name changes), in the case of the NSA it appears that the term’s meaning has been broadened. I won’t comment any further on this subject, at least relative to the NSA.
We often have a difficult time defining what words or expressions mean. “Relevant” and “meaningful” will only join this list, which, for GIPS-compliant firms, includes “material.” This doesn’t mean firms can’t use these words; just that they need to be circumspect, and document within their policies, as best as possible, what the words mean and how they’re applied.
p.s., and a special thank you to Diana Merenda for providing the “word art” graphic which appears at the top of today’s post.