GCC | 12 OCTOBER 2026
Reading time: about 6 minutes.
Capital provides options. Resilience determines which options remain available.
The Gulf has built substantial financial resources, infrastructure and investment capabilities over recent decades. Yet the disruptions of 2026 have demonstrated that financial strength alone cannot protect an economy or a business from physical constraints.
For boards and investors, the question is how effectively capital, infrastructure and decision-making work together.
01 / GOVERNANCE
Operational resilience: responsibility remains with the board
What changed
The Central Bank of the UAE's Operational Risk Management Regulation took effect on 14 September 2026.
It assigns ultimate responsibility for an adequate operational risk framework, including operational resilience, to the board. That responsibility remains with the board even where committees support its oversight.
The board itself must approve and review key operational risk and resilience strategies and policies at least annually, including risk appetite and tolerance for disruption.
Why it matters
A business continuity programme may be well documented without proving that the institution can sustain critical operations during a severe disruption. The board needs to understand the distinction between having an approved plan and possessing a credible operating capability.
The regulation applies to CBUAE-licensed financial institutions that are juridical persons. For other boards across the Gulf, the wider governance question is whether management can demonstrate the resilience of critical operations.
The boardroom question
Which critical services could we sustain under prolonged disruption, and which would fail first?
What to ask management: Demonstrate critical-service resilience through severe but plausible scenarios, including key external dependencies.
Source: Central Bank of the UAE, Operational Risk Management Regulation, Circular 1/2026, Article 4. Effective 14 September 2026.
02 / STRATEGY
Financial buffers and the limits of physical infrastructure
What changed
On 1 October, IMF Managing Director Kristalina Georgieva addressed GCC finance ministers and central bank governors.
She highlighted how investments in energy and logistics infrastructure, supply rerouting and coordinated policy responses had helped contain the impact of regional disruptions.
Nevertheless, the IMF expected the GCC economy to contract in 2026, with a potential recovery in 2027 conditional on the gradual normalisation of shipping.
She also emphasised that financial buffers cannot substitute for resilient physical trade infrastructure.
Why it matters
For sovereign investors, family offices and corporate boards, this raises a fundamental allocation question. Should additional capital support new growth initiatives, reinforce existing infrastructure or protect the resilience of current operations?
The answer depends on the investment mandate and the vulnerabilities of the underlying business. Capital reserves provide flexibility, but may not solve a problem caused by the unavailability of a critical physical asset or transport corridor.
The boardroom question
Are we allocating enough capital to protect the infrastructure and dependencies on which our investment strategy relies?
What to ask management: Identify critical physical constraints and compare the value of additional resilience investment with the cost of potential disruption.
Source: IMF, Managing Director’s Remarks at the Meeting of the Ministers of Finance and Central Bank Governors of the Gulf Cooperation Council, 1 October 2026.
03 / EXECUTION
The cost of maintaining operations through disruption
What changed
The International Energy Agency's September Oil Market Report, published on 11 September, documented substantial disruption to Gulf energy production and exports.
It estimated that total Gulf oil exports in August were around half their pre-war level, despite efforts to reroute flows and maintain supply.
The IEA also reported pressure on refined-product availability, inventories and transport costs.
Why it matters
Infrastructure alternatives can reduce the impact of disruption without fully restoring normal commercial performance.
A company may maintain operations through alternative logistics arrangements, emergency procurement or additional inventory. But doing so can increase costs, constrain capacity and consume financial buffers.
The board should therefore examine recovery in terms of both operational capability and economic performance.
The boardroom question
What does it cost us to operate through disruption, and how long can we sustain that cost?
What to ask management: Compare normal operating economics with contingency arrangements, including transport, inventory, liquidity and recovery time.
Source: IEA, Oil Market Report, September 2026, published 11 September 2026.
04 / ZOOM
Sovereign wealth funds: who decides how national capital is invested?
What are we talking about?
Sovereign wealth funds are state-owned investment arrangements established to manage public capital for defined financial or economic purposes. Their objectives vary. Some focus on long-term savings or intergenerational wealth. Others have stabilisation, diversification or development-related mandates.
How do they work, and who decides?
There is no single sovereign fund governance model. An owner, usually the state acting through an authorised body, establishes the fund's objectives and mandate.
The governing board or equivalent body oversees strategy, investment policy and accountability within the fund's legal framework. Management executes investments within delegated authority.
The precise separation between ownership, oversight and investment decision-making differs across institutions and jurisdictions.
What should a director understand?
Sovereign funds may operate with several objectives that need to be clearly distinguished. Financial returns, liquidity requirements, national development goals and investment horizons can influence decision-making in different ways.
For directors, clarity of mandate is essential. Without it, investment performance becomes difficult to evaluate and accountability may become blurred.
The Santiago Principles provide voluntary guidance on transparency, governance, accountability and prudent investment practices. They remain subordinate to applicable local law.
The boardroom question
Is the investment mandate sufficiently clear to distinguish financial performance from broader policy objectives?
Source: Background: International Working Group of Sovereign Wealth Funds, Santiago Principles, October 2008, especially principles 6 to 9; IFSWF implementation guidance.
THE BOARDROOM QUESTION
Are our financial resources matched by the operational capabilities needed to protect them?
Capital can absorb losses, finance infrastructure and support liquidity. Boards also need evidence that critical operations can continue, contingency costs are sustainable and responsibilities are clear.
Ask management to bring those dependencies together: which capabilities protect the strategy, who can act when they are threatened, and what evidence shows the response will work?
PRACTICAL RESOURCES
Continue the discussion
Principles 6 to 9 offer a useful framework for discussing the respective responsibilities of the owner, governing body and management of a sovereign wealth fund.
For your next board discussion, ask management to connect three views: critical operating dependencies, the cost and duration of contingency arrangements, and the authority to intervene. Where do the assumptions differ?
WHAT WOULD BE MOST USEFUL TO YOU?
What questions are you facing in your board or leadership role? Share with us which topics you would like us to explore, or where a conversation could help.
Thank you for reading.
The Nasaq Partners team
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