Over the past several months, FCLTGlobal has convened leading global investors and companies to explore how long-term institutions are navigating geopolitical disruption. Participants broadly shared the same observation: the geopolitical environment has shifted structurally. Trade dynamics are tilting toward resilience over efficiency, strategic competition between major powers is intensifying, and industrial policy is reshaping entire sectors — but asset prices have largely not reflected this shift to date.

In every room, the same question emerged: what should we be doing differently? Based on our recent conversations, we find that organizations that best position themselves to weather geopolitical disruption are doing so in three ways:

  1. Governance structure: Embed geopolitical uncertainty into ongoing decision-making processes
  2. Portfolio positioning: Create optionality and flexibility
  3. External engagement: Build relationships with policymakers and the media

Governance structure: Embed geopolitical uncertainty into ongoing decision-making processes

  1. Distinguishing events from trends. A useful test is to ask whether a disruption is changing your underlying investment assumptions. If your portfolio construction still holds, it is an event. Manage liquidity and stay the course. If it is beginning to erode the assumptions on which your long-term positioning is built, it is a trend, and it requires a strategic response, not just risk management.
  2. Discuss geopolitics more often, with a consistent framework. Several leading asset owners described moving away from a once-a-year conversation toward embedding it in every board meeting — one claiming they meet ten times a year, another nine. The goal is not more information, but a shared language between the investment team and the board that makes it possible to act quickly when conditions shift.
  3. Build the framework before you need it. Institutions doing this well test their geopolitical framework with the board repeatedly so that when the need arises, the decision is already made. Without a framework, board discussions on geopolitics tend to devolve into opinion-sharing rather than decision-making.
  4. Pre-define your thresholds and who has the authority to act. Several participants described the value of establishing in advance the conditions under which the institution would take action, and who has the authority to make that call without convening the full board.
  5. Refresh strategy cycles with a future The five-year strategy is increasingly obsolete. The organizations we spoke with described moving to 18-month strategy cycles, with budgeting processes involving all levels of leadership quarterly rather than annually, testing boards to maintain a future orientation while responding to a changing landscape.
  6. Build scenario analysis across multiple time horizons. Institutions with the most sophisticated approaches run distinct scenarios at three-to-five years and ten-plus years — with very different conversations at each. The scenarios are not predictions, but rather a tool for building board confidence and extracting clearer risk preferences.

Portfolio positioning: Create optionality and flexibility

  1. Treat liquidity as a strategic asset, not a buffer. The institutions best positioned during past crises were not those with the best forecasts, but those with capital available to deploy when others were forced to sell. Building explicit liquidity reserves, even at a short-term cost, is increasingly a board-level governance decision.
  2. Stress-test against worse scenarios than you think you will encounter. One leading sovereign wealth fund described modeling against a scenario significantly worse than the Global Financial Crisis to build a specific plan for what to buy, what to sell, and when. Their treasury team manages a notional post-crisis portfolio as a standing exercise.
  3. Build a ring-fenced liquidity pool and preserve structural optionality. One large state-backed investor described two related moves: creating a capital pool that is untouchable in normal conditions and only available when the alternative would be selling high-performing assets at a discount during a downturn; and structuring a key regional business to be able to operate independently if necessary. Both decisions were made in advance of any crisis. The logic is the same: exit and re-entry in certain markets may be costly or impossible, so the time to build the option is before you need it.
  4. Reposition for a less reversible world. Participants described several portfolio-level shifts: increasing infrastructure exposure meaningfully as an inflation hedge; building exposure to assets that tend to perform well during supply shocks — commodities, inflation protection, gold; and revisiting regional allocation assumptions in light of sanctions risk.
  5. Minimize dependence on critical inputs. The CEO of a global software company described asking a simple governance question of every major technology or supplier decision: what can we do to minimize dependence on a critical input? The goal is to preserve flexibility and avoid being forced into short-term decisions because a single supplier or platform has too much leverage.

External engagement: Build relationships with policymakers and media

  1. Engage with career policymakers, not just politicians. A consistent insight across all three convenings: the most durable relationships are with career civil servants, regulators, and ministry officials, not elected politicians. They stay longer and shape how policy is actually implemented. Building those relationships before a crisis is increasingly a core institutional capability.
  2. Treat political engagement as a leadership skill. Several participants noted that business leaders have historically been trained to avoid politics. That is changing. Navigating the political and regulatory environment is increasingly a skill that CEOs cannot outsource, and institutions building it now will have an advantage when conditions shift further.
  3. Build your public narrative before you need it. Large asset owners whose capital deployment decisions have political visibility have one chance to win public understanding when a crisis arrives. The institutions best positioned were those that had already invested in that relationship, explaining who they are, what they do, and how they make decisions, before they were front-page news.

Conclusion

The geopolitical environment has shifted structurally, but asset prices have not yet caught up. That window offers an opportunity, but once markets reprice the associated risk, the cost of building optionality rises, and the room to act narrows.

The institutions managing this disruption well are not waiting. They are meeting more often, building the plan before they need it, treating liquidity as a strategic asset, engaging with the people who shape policy, and building the public narrative that will protect their license to operate when the moment comes. None of these moves requires predicting the next crisis. Each one is available today, and each is far cheaper to make before it is needed than after. The institutions that act now will not have to forecast what happens next — they will already have built the plan.

Adapting vs. Monitoring: Six Questions to Consider
1. How often does your board discuss geopolitics — through a consistent framework, or as a reaction to headlines?
2. Have you identified the specific indicators that would tell you a regime shift is underway, before it shows up in asset prices?
3. Have you pre-defined the conditions under which you would act, and who has authority to make that call?
4. Is your liquidity position a strategic asset, or a financial buffer? Have you built a specific plan for what you would do in a severe stress scenario?
5. Are you building relationships with policymakers in markets that matter to your portfolio, not just with politicians?
6. Do you have a public narrative that would hold up if your institution were suddenly on the front page?

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