CHILE Law and Practice Contributed by: Franco Acchiardo, Francisca Castro, Hugo Prieto and Manuel Diumenjo, Clyde & Co Chile
4.9 Other Bases for Claims/Enforcement Against Directors/Officers Breaches of directors’ duties can be enforced by several parties, each within their respective
related-party transactions, or failure to imple - ment adequate governance and risk controls. Criminal Liability Under Law No. 20,393, directors may face crimi - nal prosecution for offences such as: • bribery; • money laundering; If found guilty, directors can face fines, impris - onment, and reputational damage. The Public Prosecutor ( Ministerio Público ) is responsible for criminal investigations and prosecutions. ESG and Reporting Failures With the rise of ESG regulations (eg, CMF Rule No. 461), failure to provide accurate or complete ESG disclosures can also lead to regulatory sanctions and potential shareholder litigation, especially if such omissions mislead investors • environmental crimes; and • fraud or misrepresentation. Recent enforcement trends show increased scrutiny from the CMF and courts, particularly regarding: • conflicts of interest; • board independence; • cybersecurity and data protection; and • environmental accountability. or affect share value. Enforcement Trends Directors are expected to document their deci - sion-making processes thoroughly to mitigate liability risks, especially in the absence of a for - mal business judgment rule in Chilean law.
jurisdictions. Shareholders
Shareholders may bring derivative lawsuits on behalf of the company to seek compensation for damages caused by directors’ negligence, fraud, or breaches of fiduciary duties. Regulatory and Criminal Authorities The CMF supervises compliance with corpo - rate governance laws and regulations. It can investigate violations and impose administrative sanctions such as fines, suspensions, or other penalties. In cases involving criminal liability, such as cor - porate fraud, bribery, environmental crimes, or other illegal activities, the Public Prosecutor of Chile ( Ministerio Público ) is responsible for investigating and prosecuting directors under Law No. 20,393 on criminal liability of legal enti - ties and other applicable criminal statutes. Consequences of Breach Civil liability: Directors can be held liable for damages caused to the company or third par - ties, potentially resulting in compensation pay - ments. Administrative sanctions: The CMF can impose fines, prohibit directors from holding office, or suspend trading of the company’s securities. Criminal penalties: Directors may face fines, imprisonment, or other criminal penalties depending on the severity and nature of the offence, following public prosecution by the Ministerio Público .
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