CHILE Law and Practice Contributed by: Franco Acchiardo, Francisca Castro, Hugo Prieto and Manuel Diumenjo, Clyde & Co Chile
• represents the board, including before regula - tors and in shareholder meetings. Directors (General Members) All directors, whether independent or not, share core responsibilities. These include: • participating in strategic planning and approving key corporate policies; • overseeing financial performance, including reviewing and approving financial statements; • supervising risk management and internal controls; • fulfilling fiduciary duties of loyalty and dili - gence, acting in the best interests of the com - pany and all shareholders; and • ensuring compliance with legal, regulatory Under specific conditions (eg, market capitali - sation, ownership dispersion, or certain related party transactions) publicly traded companies must appoint independent directors as defined by Law No. 18,046 and CMF rules. These directors: • enhance objectivity and independence in board discussions; • mitigate conflicts of interest, particularly in transactions with related parties; and • often chair or participate in the Directors’ Committee, which has specific legal duties in oversight and audit review. Board Committees Companies, particularly large or listed entities, may establish specialised committees, either by law or voluntarily. The Directors’ Commit - tee (mandatory under certain thresholds) must and ethical standards. Independent Directors
include at least one independent director, and oversees: • related-party transactions; • external audit selection and review; and • financial reporting integrity. Other common committees include: • The Audit a d Risk Committee; • Human Resources Committee; and • Corporate Governance or Sustainability Com - mittee. 4.3 Board Composition Requirements/ Recommendations Under Chilean corporate law (Law No. 18,046), board composition is subject to the following formal requirements: • Directors must be natural persons, not legal entities. • Publicly traded corporations must have at least five directors, while closely held corpo - rations require a minimum of three (as out- lined in Section 4.1 Board Structure ). Beyond these baseline legal requirements, there are no mandatory rules concerning the diversity, background, or independence of board mem - bers — except in a limited number of specific scenarios. • Independent directors: Required under cer - tain conditions for publicly traded companies, such as exceeding UF1.5 million ( Unidades de Fomento ) in equity or having a significant shareholder dispersion. These companies must also form a Directors’ Committee, which must include at least one independent direc - tor.
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