A Study of the Diversity Policy for Boards of Directors in the System of Public Companies in Chile

A Study of the Diversity Policy for Boards of Directors in the System of Public Companies in Chile

Maria Jose Bosch, Alfredo Enrione, Maria Paz Riumallo
DOI: 10.4018/978-1-6684-5151-9.ch007
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Abstract

At present, one can see how academia, sector-specific press publications, the political arena, and even public opinion call for greater diversity and inclusion on boards of directors of companies in Chile. In 2016, the Government of Chile acted to promote gender diversity on company boards by means of a policy that seeks to increase female participation on the boards of companies that form part of the System of Public Companies (SPC) to 40%. This policy was created in a context where the presence of women on the boards of IPSA and IGPA companies is less than 10%, a figure significantly lower than almost all developed countries and most emerging countries to date.
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Background

The Reality of Chilean Board of Directors

Although there is considerable evidence demonstrating the importance and profitability of having women amongst the top management of companies, the presence of women in Chile in these spheres continues to be low. There are still few women in decision-making positions.

Female participation on the boards of IPSA and TOP1001 companies has never exceeded 10%. Although there have been efforts to increase the presence of women on boards, progress has been slow and female participation is still low. In substantive terms, based on the rate of change over the last decade, reaching gender parity on IPSA boards would take 64 years.

The Chilean government by means of SPC companies has made an effort to change these numbers. Thus, in 2014 the incorporation of women in SPC boards was promoted, increasing the presence of women by more than 20 percentage points compared to the previous year (2013). Several years later in 2016, female participation is suggested to have reached 40%, and since 2017 with the diversity policy firmly in place, the proportion of female board members in SPC companies is greater than 40%, thereby exceeding the board composition of private companies which hovers around 10%. These efforts to increase gender diversity on SPC boards and the gap in relation to the private sector can be seen in Figure 1.

Figure 1.

Boards seats held by women (2011-2020) Source: The Center for Corporate Governance and Society (2020). Women on Chilean Boards: A Look Back in Time (2011-2020) and official historical data from the System of Public Companies (SPC)

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Another relevant aspect regarding the boards of private companies is their composition. Boards in Chile are tremendously homogeneous as can be seen in Figure 2.

Figure 2.

Diversity on Chilean Boards (2020) Source: The Center for Corporate Governance and Society, internal analysis based on information from the CMF and company annual reports

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