On August 19, 2025, Chile published Law No. 21.757, a landmark regulation designed to increase the participation of women on the boards of publicly traded corporations and special corporations. The law will take effect on January 1, 2026, and represents a significant step toward gender equity in corporate governance.
What does the law establish?
The reform amends the Corporations Law (Law 18.046) and introduces measures aimed at balancing gender representation:
- Board composition limit: No gender may occupy more than 60% of board seats. Initially, this is a recommended guideline, but it may become mandatory if compliance levels fail to meet expectations.
- Mandatory reporting: Companies must report to the Financial Market Commission (CMF) the composition of their boards, including the gender of each member. This data will be publicly available on the CMF website, as well as in companies’ annual reports and corporate websites.
- Periodic review: Every four years, the CMF will conduct a comprehensive assessment of compliance levels. If fewer than 80% of companies meet the rule, the 60% cap becomes obligatory, forcing shareholder meetings to repeat elections until compliance is achieved.
- Gradual transition: During the first three years, the limit will be 80%; from the fourth to the sixth year, it will drop to 70%, and finally settle at 60%.
Transparency as a driver of change
Beyond quotas, the law introduces a cultural shift. For the first time, companies must publicly justify why they do not meet gender balance recommendations. It is placing reputation and transparency at the center of governance practices.
Additionally, Article 31 ter recognizes that companies that comply with gender diversity are deemed to promote equality and may gain advantages in public procurement processes under Chile’s Public Procurement Law (Law 19.886).
Advisory Committee and State support
The law creates an Advisory Committee for Gender Equity in Boards, comprising representatives from the Ministry of Economy, the Ministry of Finance, the Ministry of Women and Gender Equality, the CMF, business associations, and non-profit organizations. Its mission is to:
- Monitor implementation of the law and detect gaps across industries.
- Propose complementary measures such as incentives, training, and awareness programs.
- Coordinate with public and private actors to gather and publish data on board composition.
It ensures that regulation is not imposed in isolation but is accompanied by support structures and institutional guidance.
Implications for businesses
For listed and special corporations, the challenge is twofold: ensuring legal compliance and leveraging the benefits of diversity. International evidence shows that gender-diverse boards:
- Encourage more balanced and innovative decision-making.
- Improve perceptions of corporate governance.
- Strengthen reputation and sustainability with investors and stakeholders.
Companies may need to adapt their bylaws, develop talent pipelines, and actively recruit women with executive experience to meet the new requirements.
A step toward the future
Law 21.757 sends a clear message: board composition is no longer just about economic power—it is also about commitment to equity and sustainability.
Forward-looking companies that embrace diversity will gain a competitive advantage, while those that resist may face both legal and reputational risks.
With Law 21.757, Chile moves closer to international standards of corporate governance and gender inclusion. For companies, this is not merely a compliance issue, but a strategic opportunity to build trust, resilience, and long-term value.
At Englobally Latin America, we advise businesses on regulatory compliance, governance, accounting, taxation, payroll, and transfer pricing, helping organizations adapt with confidence to the changing corporate landscape.