CHILE Law and Practice Contributed by: Franco Acchiardo, Francisca Castro, Hugo Prieto and Manuel Diumenjo, Clyde & Co Chile
Independent Directors Publicly traded companies meeting certain thresholds - such as having high market capi - talisation or dispersed ownership - are required to appoint independent directors, as defined by law and CMF regulations. Board Committees Some companies are required by law to establish a directors’ committee ( Comité de Directores ) - especially when they have significant asset size or a large shareholder base. This commit - tee must be led by an independent director and is responsible for overseeing internal controls, related-party transactions, and external audits. In addition, many corporations voluntarily estab - lish other specialised committees (eg, audit & risk and human resources). These bodies support the board by providing deeper oversight into complex areas and are considered good governance practice. 4.2 Roles of Board Members The roles of board members in Chile are defined primarily by the Law on Corporations (Law No. 18,046) and the corporate governance stand - ards issued by the CMF. The board is collectively responsible for the strategic oversight and gov - ernance of the company, while individual mem - bers may hold specific functions. Chairman of the Board (Presidente del Directorio) Elected by most of the board, the chairman: • leads board meetings, ensuring orderly delib - eration and timely decision-making; • co-ordinates the board’s work and serves as a liaison between the board and executive management; and
by the chair and secretary of the meeting, and often notarised or registered.
4. Directors and Officers 4.1 Board Structure
The structure of board of directors in Chile is governed by the Law on Corporations (Law No. 18,046) and varies depending on whether the company is publicly or privately held. Composition • Listed corporations ( Sociedades Anónimas Abiertas ) must have at least five directors. • Closed corporations ( Sociedades Anónimas Cerradas ) require a minimum of three direc - tors, unless the bylaws provide otherwise. Term and Re-election Directors may serve for a maximum three-year term, after which they may be re-elected indefi - nitely. The term begins at their election by the shareholders’ meeting and ends once their suc - cessors are appointed. Election Process Directors are elected by the shareholders’ meet - ing using a cumulative voting system, where each shareholder may distribute their votes among one or more candidates, based on the number of shares held. This system allows minority shareholders to concentrate votes and potentially elect a representative. Chairman of the Board Once constituted, the board elects a Chairman ( Presidente del Directorio ) from among its mem - bers by a majority vote. The chairman represents the board and presides over its meetings.
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