Corporate governance is the foundation on which trust is built, and it is essential to understand that it is not just a matter of having a good board of directors, but also requires other factors, such as business ethics and transparency.
2024 was the year of regulations, and companies already feel the impact of new requirements. But the real challenge will come in 2025. Not only will they have to adapt to comply with key regulations like the Economic Crimes Law, the Karin Law, the Cybersecurity Framework Law, and the Personal Data Protection Law, but they will also need to focus on strengthening their corporate governance to comply with the laws without losing sight of integrity and ethics in business.
This challenge intensifies in an increasingly complex and changing environment, which the Financial Market Commission (CMF) has understood. In recent months, it has modified regulations and launched new ones to reinforce corporate governance. For example, in October 2024, it issued General Standard (NCG) No. 519, which refines the guidelines for preparing the Integrated Annual Report that supervised institutions must present, detailed in NCG No. 461, and introduces new information standards, requiring more details about the board’s role in risk management and sustainability.
Additionally, in December, General Standards Nos. 528 and 529 were published. They impose requirements on intermediary companies such as stockbrokers, securities agents, and product brokers, demanding a solid organizational structure tailored to their operations, with effective resources and internal controls to manage and mitigate these risks.
Similarly, in September 2024, the U.S. Department of Justice (DOJ) updated its “Evaluation of Corporate Compliance Programs” guide to assess its effectiveness. This version incorporated changes to address trends like risk management arising from using new technologies such as artificial intelligence, to promote its ethical and responsible use.
It also added an item on companies’ commitment to whistleblower protection, requiring them to have anti-retaliation policies and train employees on these internal policies. Both topics are crucial today due to increasing technological risks and the rise of corruption scandals, many of which we know thanks to a whistleblower.
Although the United States designed this guide, its relevance transcends national borders. In an increasingly globalized world with high trade exchange, companies worldwide must align with best compliance practices to respond to an increasingly demanding regulatory environment, with new and sophisticated threats, and rapidly changing trends.
To face this regulatory scenario and accelerated changes, companies must proactively ask themselves: Are we prepared to respond to these challenges? Have we reviewed our values and purpose to face the changes? Do we fully understand the current environment in which we operate? Do we have responsible leaders to guide our actions?
Solid governance will not only help make decisions prioritizing the “how ” but also ensure that results are not the only objective. Companies must ensure that regulatory pressures do not become rushed compliances but involve a true cultural transformation as part of their corporate DNA. Otherwise, all efforts will be in vain.
Corporate governance is the foundation upon which trust is built, and it’s essential to understand that it doesn’t just mean having a sound board; it also requires other factors such as ethics and transparency in business, having incentive structures based on good practices, reasonable risk and crisis management, and a commitment to all stakeholders. Simply put, it’s how organizations operate, aligned with their values and purpose.
Therefore, strengthening governance and reflecting on organizational culture before aligning with external regulations will allow companies to respond to them more effectively. This process must be accompanied by responsible leadership that currently requires new skills and approaches. Their role is not limited to meeting corporate objectives but to making ethical and sustainable decisions, adapted to current trends and demands.
Strengthening governance is not a cliché; it’s the key that every company must consider to face a disruptive and evolving world.
By Susana Sierra
Published in El Mostrador
