Government authorities explained the objectives of the initiative to the Women’s and Gender Equality Commission, which would affect nearly 400 companies in the country.
This Thursday, the Government presented in the Chamber of Deputies and Deputies a project that seeks increase the participation of women in public limited companies.
The initiative was presented at the Commission for Women and Gender Equity by government authorities.
Specifically, it seeks to create a mixed mechanism and gradual application in the boards of these public limited companies (open and special). The idea is to move from a suggested fee model to a required fee model in six years.
As explained by the Minister of Economy, Nicolás Grau, Based on the OECD, Chile has an average of 15.2% female participation in the boards of large companies.
This is lower than the average for members of the Organization for Economic Cooperation and Development, which is close to 28%.
To this, the minister added that those with the highest participation rates are Iceland (47.1%), France (45.3% and Norway (41.5%). These three countries gradually incorporated quotas.
On the other hand, the reality of the European Union was presented as an example. In 2026, the required quotas of at least 40% of women on company boards will be implemented in its member countries.
National scenario regarding the participation of women
The Secretary of State explained that women have a participation of 40% in business organizations.
However, it fell when looking at management (21.1%) and boards (12.7% considering the companies where the standard will be implemented).
Another of the points that stood out was the implementation of the law that establishes gender representation on the boards of public companies.
This, in addition to state companies that are part of the Public Companies System (Law 21,356). The minister stressed that his application is successful.
Among the reasons, he said that It is due to the fact that 51% of the directors of these companies are women and 37% are directed by the sames.
Likewise, it was explained that, in the first instance, they would be about 200 workers those who would assume these positions in the companies.
“The participation of women on boards changes companies. And the evidence we have is that it changes them for the better,” said Minister Nicolás Grau.
Faced with this scenario, he argued that companies with a greater participation of women tend to show higher profitability. Similarly, she stressed that the companies with mixed or diverse boards have less volatility in the price of their shares.
The Undersecretary of Economy and Smaller Companies, Javiera Petersen, was in charge of explaining the design of the proposed project.
In his presentation, he pointed out that the standard gives companies the flexibility to choose whether to apply a suggested or required fee.
Along with this, he clarified that the rule will be applicable exclusively to open and special corporations.
Likewise, it includes those supervised by the Financial Market Commission (CMF), such as banks, insurance companies, fund managers, AFPs, etc.
The initiative considers that, during the first three years of application of the law, a quota of at least 20% participation of women.
If they do not comply, companies must justify their reasons publicly on their website. In the same way, the CMF will make its arguments public.
Between the third and sixth year, the norm indicates a minimum suggested fee of 40%with the same justification requirements for non-compliance.
In the same way, from the sixth year onwards, the law will enter into full force with a mandatory quota from 40%.
On the other hand, if this is not fulfilled in the board elections, the project indicates that the process should be repeated until the required is achieved.
Failure to comply with this will be sanctioned by the CMF. In any case, the shareholders of each company may determine the form or mechanism to comply with the quotas in their bylaws.
In addition, the undersecretary specified that this grants sufficient flexibility to the different types of companies that exist.
For their part, the Parliamentarians valued the initiative presented by the Executive. Mainly, they highlighted the Government’s motivation regarding the existence of a greater participation of women in decision-making spaces.
However, some raised their concerns regarding the possibility of reaching the established quota in some productive sectors.
Finally, they requested more background on the supposed improvements that the greater participation of women has in the management positions of the companies. Faced with this, they presented the requirement on the importance of knowing the opinion of the unions affected by this regulation.