After agreement with civil society organizations: Undersecretariat of Economy gave indications for “More Women on Boards” programme.

After agreement with civil society organizations: Undersecretariat of Economy gave indications for “More Women on Boards” programme.

After weeks of dialogue and work that culminated in an agreement signed with various civil society organizations, Undersecretary for Economy and Small Business Zavira Peterson entered the House of Representatives’ Committee on Women and Gender Equality on Wednesday. For the “More Women on Boards” Bill, which seeks to increase the participation of women on the boards of directors of open and specialized companies supervised by the Financial Markets Commission (CMF).

According to the Fifth Report on Gender Indicators in Institutions in Chile 2023, the participation of women in these cases is only 15.9%. Also, 4 out of 10 companies reporting to the CMF are “zero companies”, meaning they have no women on their board of directors.

Putting these figures on the table, a few weeks ago, the government signed an agreement to advance this issue with four civil society organizations: Fundación ChileMujeres, ComunidadMujer, The Institute of Directors of Chile and the Network of Women in Senior Management (Redmad ). With quotas recommended as a general rule, the document establishes general principles for promoting a design that preserves greater diversity on boards, incorporating a periodic evaluation mechanism by the CMF, with the definition of exceptional quotas, in a defined manner and as a result of said evaluation.

“We saw that there was a cross-cutting consensus on the purpose of having diagnostic and diverse boards. There were differences on what was the best design for our country, and that’s why we sat down to talk, listen and collect all the ideas and suggestions that the companies raised, hoping to move forward. Detailed Deputy Secretary Javira Peterson.

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In this way, the new design of the bill considers the recommended quota of 60% of the sexes, permanently, at the maximum. Every four years, the CMF will carry out an assessment based on objective indicators, which will allow monitoring the adoption of the policy and, in turn, a margin of adaptation for the institutions. These indicators show that at least 80% of companies have adopted the recommended quota and less than 5% have “zero companies”. Then, only if these indicators are not met, companies that do not reach the prescribed quota will move to the intermediate regime of the required quota until the next evaluation period.

It should be noted that implementation of the Act will be gradual. The recommended quota is that gender participation on boards should not exceed 80% in the first three years and 60% from the fourth year onwards. Additionally, the plan contemplates a provision that protects shareholders’ rights over directors elected prior to the CMF measure, allowing them to complete their terms if the company switches to a transitional model of required quotas.

Faced with these symptoms presented to the commission, Deputy Secretary Peterson said that the benefits of this law were not only for women, but “All companies, and the economy in general, will see the positive effects of adding new perspectives to their boards.”

In November 2022 the bill “More Women on Boards” was presented by the government of President Gabriel Boric. After being reviewed by the Economic and Financial Commissions, it specifically returned to the Commission on Women and Gender Equality for discussion.

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