The Context
Between 16-17 April 2026, the Saudi Public Investment Fund (PIF) announced a strategic pivot. The sovereign wealth fund is reducing its international investment target from 30% to 18-20% of its portfolio. Concurrently, reports emerged that PIF is on the verge of cutting financial support for its subsidiary, LIV Golf. The numbers are stark. PIF has invested over $5.3 billion since LIV’s 2022 launch. Documented losses from 2022-2024 exceed $1 billion. The LIV CEO’s statement that funding is only confirmed “through the season” reveals a critical governance gap. The audit trail shows a strategic asset haemorrhaging cash.
The Risk
For a director, this is a failure of financial stewardship. The core duty under the Companies Act 1993 is to act in the best interests of the company. A $5.3 billion commitment that loses $1 billion in three years, then faces abandonment, may indicate a failure to exercise the care, diligence, and skill of a reasonable director. The strategic misalignment—LIV not fitting the new domestic strategy—suggests a prior failure in due diligence and ongoing strategic oversight. While no enforcement action is documented here, the financial evidence creates a prima facie case for a breach of duty. In a New Zealand context, such a significant loss of shareholder (or, in this case, sovereign) funds could trigger scrutiny under the Financial Markets Conduct Act 2013 for misleading conduct in relation to financial products, if similar investments were marketed. Personal liability for reckless trading is a mathematical possibility when losses reach this scale.
The Control
Directors must demand a forensic-level review of all major capital allocations. This involves mapping every dollar of the $5.3 billion investment against its original business case and subsequent performance metrics. The board must institute a mandatory ‘strategic realignment’ trigger. Any material shift in the parent entity’s strategy must automatically force a re-evaluation and documented vote on the continued viability of all subsidiary investments. Governance is not a theory; it is a series of validated numbers.
The Challenge
These are the critical questions you should be raising at the board table:
| What is the exact, audited return on investment (ROI) for the LIV Golf venture, and how does it compare to the weighted average cost of capital (WACC) used in its original approval? | |
| Show me the documented board minutes where the escalating $1bn+ losses were explicitly acknowledged and the decision to continue funding was rigorously challenged against our duty of care. | |
| Which other major investments in our portfolio have a similar profile of high capital outlay, strategic misalignment, and unclear long-term funding—and what is our quantified exposure? |