Published and draft legislation - Chile

Disclosure of information by listed companies

Standards 385 and 386 of the Securities and Insurance Supervisor on Corporate Governance, 8th June 2015

Last June, the Securities and Insurance Supervisor (SVS) in Chile issued Standards 385 and 386 to improve and expand the information to be published by publicly traded companies regarding their corporate governance. They incorporate best practices in corporate social responsibility and sustainable development.

Standard 385 repeals Standard 341, published in 2012, to ensure that the companies:

  • Implement policies of corporate social responsibility and sustainable development: promoting diversity in the composition of their boards of directors and in the appointment of key executives of the company; and disseminating information to shareholders and other stakeholders
  • Improve the quality of the information contained in the companies’ evaluation of their own board, involving external parties in its preparation
  • Disclose their management policy regarding conflicts of interest and publish the amendments to the code of conduct for the board.
  • Promote adoption of principles, guidelines and national and international recommendations from, eg, the Committee of Sponsoring Organizations (COSO), Control Objectives for Information and Related Technology (COBIT) and ISO 31000 and 31004.

Meanwhile, Standard 386 amends General Regulation 30, recommending that companies:

  • Send a scanned copy of the annual report to the SVS and fill in the electronic form relating to information on corporate social responsibility and sustainable development.
  • Include information in the annual report concerning:
  • Diversity of gender, nationality, age and length of tenure of directors, senior managers and other executives reporting directly to the board, and in the organisation as a whole.
  • Remuneration and gender (providing a comparative breakdown of information on salary by type of position, duties performed and level of responsibility for females relative to males)

With the publication of these standards, the SVS is creating incentives to provide investors with sufficient information to take well-informed investment decisions. However, the legislation merely recommends practices that companies can voluntarily decide to adopt, in the light of their own specific features and peculiarities.

Thus, in line with the “comply or explain” principle of codes such as the Unified Good Governance Code for listed companies (Spain, CNMV), the board of each company must disclose a clear, precise summary, on the SVS website, of how each particular practice is implemented or why it has not been applied.