Chile approves bill promoting gender diversity on corporate boards

On August 19, 2025, Law No. 21.757 – titled “More Women on Boards” – was published in Chile’s Official Gazette (Diario Oficial), amending Law No. 18.046 on Corporations (LSA). The law aims to promote greater gender equity in the composition of boards of publicly held corporations and special corporations supervised by the Financial Market Commission (CMF).[1]

In our alert, we discuss the main amendments to the LSA and key details for compliance.

Maximum representation percentage of one gender

The bill introduces a suggested composition rule, stating that individuals of the same gender may not exceed 60 percent of the total board members in publicly held and special corporations.

The suggested composition rule will be implemented gradually according to the following timeline:

• For three years from January 1, 2026, representation may not exceed 80 percent from the same sex
  
  
• From January 1, 2029, to December 31, 2031, representation may not exceed 70 percent
  
  
• From January 1, 2032, and onward, representation may not exceed 60 percent

To comply with the implementation of the bill, corporate bylaws must include mechanisms to ensure that representation does not exceed the maximum proportion during board elections at the respective shareholders’ meetings.

Public explanation requirement

Publicly held and special corporations must report the identity and gender of each board member to the CMF. If the suggested 60-percent proportion is not met, they must provide an explanation, which will be published on the CMF’s website. This information must also be included in the company’s annual report and on its website, if available.

Periodic evaluation by the CMF

Starting in July 2032, the CMF will assess every four years whether (1) at least 80 percent of affected corporations comply with the maximum gender representation and (2) whether less than 5 percent of corporations have boards composed exclusively of one gender.

If either condition is not met, a mandatory compliance period will be activated for four years during which there will be legal enforcement of the maximum percentage. Enforcement measures may include repeating elections at shareholders’ meeting if the results do not meet the requirement. The CMF may also call an additional shareholders’ meeting and/or impose sanctions. In addition, any alternate and replacement directors must be of the same gender as the original member.

Reputational recognition

In addition to their status with the CMF, companies that comply with the suggested proportion will be recognized as promoters of gender equality and female leadership within their corporate structures, under the public procurement system of Law No. 19.886.

Advisory committee

The bill will establish the “Committee to Achieve Equity on Corporate Boards”, comprising representatives from the Ministries of Economy, Finance, and Women and Gender Equity; the CMF; business associations; and civil society organizations. Its functions include evaluation, coordination, training promotion, and annual reporting on the implementation of the new Law.

Effective date

The law will take effect on January 1, 2026. The first compliance assessment will be in July of the sixth year, with a preliminary, non-binding assessment in July of the third year, based on data available up to the last business day of the preceding June.

Key considerations

Although the regulation aims for progressive, gradual, and flexible implementation, it presents practical legal and operational challenges for publicly held and special corporations, particularly regarding:

• Review and adjustment of corporate bylaws to include mechanisms for director elections that ensure limits to gender representation
  
  
• Design of internal nomination and succession policies that incorporate diversity criteria and anticipate mandatory compliance scenarios
  
  
• Strengthening candidate search and selection processes, focusing on identifying profiles aligned with the regulation
  
  
• Information management and compliance with new reporting obligations to the CMF, requiring companies to report the identity and gender of each board member within five business days of the election, and reasons for not meeting the suggested gender quota, if applicable

For more information on any of these matters, please contact the authors.

Leer este artículo en español.

 

^{[1] These special corporations include, among others, banks, pension fund administrators (AFPs), and insurance companies.}