Board of Directors

Aguas Andinas’ Board Composition

Aguas Andinas S.A. is managed by a Board of Directors which is made up of 7 titular members, each of which has a respective alternate who can replace him/her indefinitely in the case of vacancy and temporarily in the case of absence or temporary impediment. The President/Chairman of the Board of Directors is Felipe Larrain Aspillaga¹.

Functioning of the Board of Directors

The Board of Directors meets in ordinary and extraordinary sessions. The first take place in predetermined dates by the Board itself and there is, at least, one meeting per month. The second take place when the President/Chairman schedules one on his account or when it is indicated by one or more directors. In order for the latter to take into effect, the President of the Board has to deem that the meeting is necessary unless this meeting is requested by the absolute majority of directors. In each case, the quorum for the Board of Directors session to takes place is absolute majority of its members and agreements are passed with the favorable vote of the absolute majority of members present in the session unless it is an agreement that, according to Aguas Andinas’ bylaws, the law and its Code or other specific instructions, require a superior majority.

Election of the Board of Directors

Directors are chosen for a period of three years, after which they must be completely renewed. In addition to this, the Board will also be renewed in its entirety prior to the stipulated period when there is a vacancy in the roles of titular director and his/her alternate, or also when shareholders choose to do so in an Ordinary or Extraordinary Shareholders Meeting.

For the elections of the Board members, shareholders can propose candidates for the Director position prior to the General Shareholders Meeting where they will be put to a vote.

The Chief Executive Officer must inform shareholders at least two days prior to the beginning of the Shareholders Meeting, through the means that s/he esteems pertinent, and on the Company’s website, the list of candidates for the Director position, that, in each case, have accepted their nomination and which have declared that they are able to fulfill their role. In the case where the Company is unable to inform shareholders prior to the Shareholders Meeting, providing the list of candidates at the beginning of the Shareholders Meeting will suffice.

It is possible to add new candidates to the list in the same Shareholders Meeting if the person which proposes the candidate presents a document through which the candidate accepts his/her nomination and declares that they are able to fulfill the role.

Shareholders have one vote for each share they own or represent, and may accumulate them in favor of one person or distribute their votes in the way that they see fit, the resulting elected members will be those who accumulate the most amount of votes during one single voting round, until the number of seats of the Board are filled. In the case of alternate directors, the mere choice of a director includes an alternate who has been previously nominated for that director.

Independent Directors

The Board of Directors has independent directors in accordance to what has been established in Article 50 bis of Law 18.046 regarding Open Corporations. The independent directors of Aguas Andinas are those listed in the Regular Directors section of the Investor Relations web page. In accordance to Article 50 bis of Law 18.046 regarding Open Corporations, independent directors are those who have not been in any of the following situations at any time during the last eighteen months prior to their candidacy.

Those who have:

1. Maintained any economic, credit, professional or commercial relationship, interest or dependency, of a relevant nature and volume with the corporation, the other corporations of the group of which it is part of, its controller, nor with the leading executives of any of them, or have been their directors, managers, administrators, senior executives or advisors.
2. Maintained a family relationship up to the second degree of consanguinity with the aforementioned persons.
3. Have been directors, managers administrators or senior executives of nonprofit organizations that received relevant contributions, or donations from persons described in item 1
4. Have been partners or shareholders who have owned or controlled, directly or indirectly, 10% or more of the capital; directors; managers; administrators or senior executives of organizations that have provided legal or consulting services, for relevant amounts, or external auditing firms, for the persons described in item 1.
5. Have been partners or shareholders who have owned or controlled, directly or indirectly, 10% or more of the capital; directors; managers; administrators or senior executives of major competitors, suppliers or customers of the corporation.

In accordance to the law, in order to be able to be elected as independent directors, candidates must be proposed by shareholders who represent 1% or more of the Company’s shares at least ten days in advance from the proposed General Shareholders Meeting in which board members will be elected. The independent director candidate and his/her respective alternate, on their end, with no less than 2 days prior to the abovementioned Shareholders meeting, must provide the Chief Executive Officer a sworn independence statement in accordance to Article 50 bis of Law 18.046 regarding Open Corporations, detailing that:

1. They accept being candidates for the independent director position;
2. They are not in any of the situations indicated in Article 50 bis mentioned above;
3. They do not maintain any relationship with the corporation, the other corporations of the group of which it is part of, its controller, nor with the leading executives of any of them, that can deprive a sensible person a reasonable degree of autonomy, interfere with the possibility of conducting objective and effective work, generate a potential conflict of interest or dampen their sense of judgment, and
4. Take on the commitment of continuing to be independent for the whole period that they are directors of the company.

Directors Committee

Additionally, and in accordance to what is stipulated in Article 50 bis of Law 18.046 regarding Open Corporations, Aguas Andinas S.A. has a Directors Committee which is made up of 3 members, most of which must be independent directors. The members of the Directors Committee are Rodrigo Manubens Moltedo, Jaime Arellano Quintano y Fernando Samaniego Sangroniz.

In accordance to the law, the Directors Committee has the following functions:

1. Examine the external auditor’s reports, the balance sheet and other financial statements presented by the administrators or liquidators of the society to shareholders, and to provide their opinion about these prior to when these are presented to shareholders for their approval.
2. Propose to the names of external auditors and private risk classifiers, to the Board of Directors so that these can be suggested in the respective Shareholders Meeting. If the Board disagrees, the Board will formulate its own proposal and both will be submitted for their consideration in the shareholders meeting.
3. Examine the background information regarding operations conducted between related parties and create a report about these operations. A copy of this report is read in the Board of Directors session where the operation will be approved or rejected.
4. Examine the remuneration systems and compensation plans for managers, key executives and Company workers.
5. Prepare an annual report of the Committee’s management and that includes its main recommendations to shareholders.
6. Inform the Board regarding the need to hire or not hire external audit firms for services which are not part of the external audit, when these are prohibited in accordance to what has been established in Article 242 of Law N°18.045, taking into consideration if the nature of these services can generate a risk of the loss of independence.
7. The remaining subject matters that the bylaws stipulate, or that a shareholders meeting, or the Board itself recommends.

¹ The Company’s directors do not hold executive positions in the Company.