Law 21,757: Women on Boards and the Challenge of Preparing Today
Law 21,757: Women on Boards and the Challenge of Preparing Today
On August 19, 2025, Law No. 21,757 was published, establishing a mechanism to increase the participation of women on the boards of directors of publicly traded companies and special corporations supervised by the Financial Market Commission (CMF). The law will take effect on January 1, 2026, and marks a profound change in the way companies must conceive their governance, select directors, and build more diverse leadership teams.
The law sets gradual limits on maximum representation by gender on boards of directors, starting at 80% between 2026 and 2028, decreasing to 70% between 2029 and 2031, and finally reaching 60% from 2032 onwards. In practice, this means that, from the outset, boards of directors must have at least 20% female representation and move toward more balanced arrangements in subsequent years. In addition, statutes are required to incorporate mechanisms to ensure these proportions in the director election process, encouraging companies to review and update their internal governance frameworks.
A relevant aspect of this regulation is that companies that comply with the suggested percentages will be recognized as entities that promote gender equality and female leadership in their organizational structure. This recognition is not only reputational: it also has an impact on public bidding processes, since, under Law 19,886 on Public Procurement, these companies will be able to access additional points in the evaluation of bids, combining economic incentives with the promotion of equity.
The challenge becomes more evident when reviewing the data on the reality in Chile. According to data from the CMF's 2025 gender study, Chile is among the bottom 25% of the global ranking for female participation in management positions, with only 17% representation, while the international median is 36.4%. In leading countries such as France and the United Kingdom, the percentages exceed 43%. In our country, the only organizations that show figures close to the global median are the largest savings and credit cooperatives, with 35.1% of women on their boards. In contrast, banks, insurance companies, securities issuers, and other financial companies do not exceed 20%, reflecting the structural challenge that this law seeks to address.
The CMF had already been making progress in this area through regulations such as NCG 533, which requires companies to align their external director selection policies by December 11, 2025, and NCG 519, which requires transparency regarding the existence of diversity policies and whether boards consider gender representation limits. In addition, companies must inform shareholders, prior to board election meetings, about the diversity of skills, experience, and perspectives that the board considers necessary to ensure decisions aligned with the company's interests. In other words, the conversation is no longer limited to numbers: today we are talking about the strategic composition of boards.
All of this requires a change in approach. Companies must go beyond formal compliance with quotas and begin to design robust processes for selecting, developing, and preparing talent. Incorporating a matrix of skills and knowledge of the board of directors in the annual report will be more than just an option; it will be a strategic tool that will allow companies to assess gaps, identify needs, and demonstrate management capacity. However, this is no trivial matter. Designing mechanisms that integrate gender diversity, experience, vision, and capabilities requires sustained planning and training.
In my opinion, the real challenge lies in preparing the people who will fill these positions. The law requires structural changes, but this will not be enough if companies do not also invest in leadership development, training female profiles, and opening up to new talent. Diversity is not just a number; it is the integration of perspectives, experiences, and knowledge that enrich strategic decisions and increase the resilience of organizations.
Law 21,757 also provides for flexibility mechanisms. During the transition period, companies that do not meet the recommended percentages must inform the CMF of the reasons within five business days after the election of the board of directors and publish the same information in their annual report and on their website. The CMF, for its part, will publish a preliminary report in July 2028 on the progress made by companies, which will serve as a barometer of the process, although it will not have any punitive effects. In July 2031, however, the first official calculation will be made to assess whether at least 70% of companies comply with the limits and whether less than 5% have boards composed exclusively of one gender. If these objectives are not achieved, as of January 2032, compliance will no longer be suggested but will become mandatory, with the possibility of repeating board elections and applying corrective mechanisms.
We are facing a structural change that goes beyond regulations. This law is also an invitation to rethink corporate governance in an environment marked by new regulatory, climatic, social, and reputational risks. Organizations that begin now to adjust their bylaws, review the composition of their boards, design skill matrices, and prepare leaders will be better positioned to comply with the law while strengthening their reputation, attracting investment, and improving their competitiveness in a market where sustainability and diversity are no longer differentiators but basic expectations.