Key facts
- Formal veto rights are held by a minority of enterprise risk management teams.
- These veto rights are used infrequently.
- Veto power is concentrated among the largest lenders.
A recent study on enterprise risk management (ERM) practices has found that the power of veto over business decisions, while formally held by a minority of ERM teams, is rarely exercised. The Risk Benchmarking study, which surveyed banks, indicated that this power is concentrated among the largest lenders. Despite the limited use of formal veto rights, the study suggests that the influence of ERM functions may be deeper than these explicit control mechanisms imply, potentially stemming from greater integration within the business decision-making processes.