IGJ Requires Gender Parity on certain Company Boards in the City of Buenos Aires

Resolution No. 34/2020 issued by IGJ (Public Registry or the City of Buenos Aires)  (the “Resolution”), provides that “civil associations, simple associations, certain corporations, as long as they are or remain comprised by certain specific cases contemplated by section 299, of Law No. 19,550 (“ACL”), foundations with a board of directors for temporary and elective integration and the State Companies (Law No. 20,705)” must include in their board of directors, and where appropriate in the supervisory committee, a composition that reflects gender diversity, establishing a composition of the referred boards to be integrated: (i) in the case of an even-numbered board, the same number of women and men; (ii) in the case of an odd-numbered board, with a minimum of one third  women.

The Resolution, which is only valid in the City of Buenos Aires, will be applicable to both the legal entities described above, whether they are in the process of incorporation or are to be incorporated, as well as those already registered with the IGJ. In this second case, the adjustments must be made for the appointments of the members of the board of directors and, if applicable, of the supervisory committee, appointed after the Resolution comes into effect.

Additionally, there is an obligation to include a description of the gender policy applied to the board of directors in the Annual Report, including its objectives, the measures adopted, the way in which they have been applied, in particular, the procedures to procure a number of women on the board of directors that allows for a balanced presence of women and men.

The IGJ may, through the issuance of well-founded resolutions and upon an express request in this regard, exempt from the provisions of the Resolution, in whole, partially, transitory or definitive manner, the legal entity that may be required, based only on singular, extraordinary, understandable and objective circumstances, derived from its constitutive background and / or type of conformation and / or social activity aimed at achieving its purpose.

The Resolution also provides that the IGJ will report any case of non-compliance or reluctance to implement measures to achieve, respect and maintain gender parity to the INADI (National Institute against Discrimination, Racism and Xenophobia) and the Ministry of Women, Genders and Diversity of the Argentine Nation.

It is important to highlight that limited liability companies, corporations not included in section 299 of the ACL and those that, even if comprised by said section, make public offer of their shares or debentures, have capital stock higher than ARS 50 million and sole shareholder corporations, are not included in the obligations set forth by the Resolution.

This Resolution goes beyond the scope of the one issued by the Argentine Securities and Exchange Commission No. 797/2019. This Resolution states similar obligations regarding the preparation of the Annual Report and a report for the Code of Corporate Governance where the creation of a diverse Board of Directors should be promoted, considering the diversity of gender, geographical origin, age, ethnic profile and professional experience.