We invite you to read the column written by our Legal & Business Director, Stephanie Cruz, on the new requirements imposed by the Economic Crimes Law on those seeking to join a board of directors.
A few years ago, when companies in Chile—and much of the region—wanted to appoint a board member, they tended to focus almost exclusively on the person’s professional background or expertise in a specific area, such as finance, risk management, or corporate law.
However, today, the scenario has changed radically. The entry into force of the Economic Crimes Law in the country reminds us that being a director goes far beyond formal compliance or operational results.
Being part of a board of directors has always implied comprehensive responsibility for the company. But now, it is not only expected in good faith: the legislation requires active and diligent management in multiple areas. Directors must be deeply involved in areas as diverse as talent management, environmental policies, diversity and inclusion, sustainability strategy, cybersecurity, tax compliance, among others, and must be able to demonstrate this.
The difference is that today this obligation is not only moral or reputational, but also legal. The new Economic Crimes Law establishes that directors may be subject to penalties—including fines and even imprisonment—if they do not fulfill their role effectively.
Mistakes are allowed, yes, but it will be essential to demonstrate that the director acted with the diligence and care required by law, and that any error was the result of reasonable management, not negligence or malice.
Among the crimes covered by the law are disloyal administration, corruption among private individuals, the provision of false information in balance sheets, abusive agreements, and violations of environmental regulations.
This means that a director, in the case of an environmental crime, for example, cannot claim ignorance or hide behind the excuse that “I only oversaw the financial area.” Responsibility is—and always has been—shared, cross-cutting, and personal.
This new regulatory environment is no small matter. Therefore, ongoing training is more crucial than ever. Today, it is not enough to have experience or technical expertise. A systemic vision, skills to identify risks in all areas of operation, and a deep understanding of legal and ethical obligations are required.
Boards that update themselves and adopt a culture of active responsibility will not only reduce their legal risks, but also strengthen the sustainability and long-term value of their companies.
The new legislation does not change the essence of what good corporate governance should always have been. It has simply made the consequences clearer and served as a reminder that leading from a boardroom involves much more than compliance: it means acting with vision, commitment, and, above all, effective responsibility.
Column written by:
Stephanie Cruz | Legal & Business Director | scruz@az.cl
