On November 25th, the Government entered the Chamber of Deputies the “Project Law to increase the participation of women in the boards of public limited companies and special limited companies” (hereinafter, the project”).
The most relevant aspects of the Project are:
1- Content and Implementation.
The Project consists of a single provision that modifies article 31 of Law No. 18,046 on Public Limited Companies, and a transitory provision, whose objective is to increase the participation of women in the boards of public limited companies and special public limited companies, through of the establishment, during the first six years of validity of the Law, of a suggested quota and, later, of a required quota.
If approved as a law, it would enter into force gradually, in accordance with the following rules:
- Starting from the first month from the publication of the law, and until the thirty-sixth month, it will be suggested to companies to comply with a quota of at least 20% of women in their boards.
- From the thirty-seventh month from the publication of the law, and up to the seventy-third month, the suggested fee will increase to at least 40%.
- From the seventy-fourth month from the publication of the law, it will be fully in force, so the suggested quota of 40% of women on the boards of these companies will become a required quota. Additionally, the obligation will be imposed that the substitute directors of those regular directors, are also women.
If the minimum percentage of women is not reached in the board election, it must be repeated until it is met. If the non-compliance persists, the Financial Market Commission (CMF for its initials in Spanish) may apply sanctions in accordance with the general rules and its control policy.
2- Processing Stage.
The Project is currently in the first constitutional process, under review by the Women’s and Gender Equality Commission. Once known by the latter, it must go to the Economy and Finance Commissions, as pertinent. It should be noted that the content of the Project may vary and that it is only of simple urgency.