80% of enforcement actions now hinge on accurate ownership records and conflict controls—an eye-opening shift that changed how we view compliance overnight.
We outline how regulators expanded rules beyond listed issuers to large private firms and foreign affiliates. This means every company must register UBOs electronically and face fines for gaps in information.
We show practical steps to align a group code, board duties, and directors’ roles with local standards. Our aim is to turn rules into clear policies that improve decisions, reduce risk, and protect capital.
Adoption of better practices strengthens management oversight and boosts investor confidence. We focus on measures that affect dividend expectations, conflicts of interest, and market perception.
Key Takeaways
- Regulators now require UBO registration and stricter transparency across companies.
- We translate rules into board-level and operational steps that balance costs and control.
- Better practices reduce risk and improve access to capital and investor trust.
- Policies on conflicts and information handling directly affect dividend policies and reputation.
- Our guide helps align group standards with local regulators and market expectations.
Why governance matters now for subsidiaries in Colombia
Recent enforcement shows that transparency rules now reach most business groups, not only stock market participants.
Authorities expanded oversight beyond listed firms and DIAN began follow-ups when entities failed to register UBOs. Inter-agency action has increased enforcement on money laundering, bribery, and corruption using control-chain data.
We explained how measures such as UBO reporting and conflict controls became standard expectations across many companies. That adoption lowered enterprise risk by tightening management discipline and improving dividend predictability.
What this means for a company: leadership must document related-party decisions, disclose interests, and prepare timely information requests from regulators and investors. Failure to do so risks reputational and regulatory setbacks.
- Investors now weigh governance when modeling risk, affecting market valuations and access to financing.
- Baseline policies on conflicts, reporting, and audit readiness act as proactive risk mitigation.
- Consistent practices across companies help align strategy and stabilize dividend communication.
Regulatory landscape shaping corporate governance in Colombia
We trace a legal arc that raised board duties and public disclosure over a long period. The rules moved firms from basic group registration to precise conflict procedures.
From Law 222/1995 to Decree 46/2024: evolution and impact
Law 222/1995 began mandatory business group and control disclosure. Later, Law 964/2005 required at least 25% independent directors for listed firms. These steps changed board composition and market signals.
“Fulfill or explain” Country Code refinements
The Country Code (2007, refined 2014) launched a survey‑based fulfill or explain model. Companies had to report on meetings, board duties, disclosure, and dispute processes. This created a clear standards benchmark.
«Adoption of the Code raised measured governance scores and helped align dividend expectations,» research shows.
- Decree 46/2024 tightened conflict rules, authorization steps, and prohibitions.
- Year‑over‑year adoption raised IGCCP scores and improved investor trust.
Corporate Governance for Subsidiaries in Colombia
To reduce risk and boost investor trust, we map group standards into actionable procedures for each affiliate.
Aligning parent policies with Colombian regulations and market expectations
GEB’s model bundles bylaws, internal board rules, a Corporate Group Agreement, and targeted policies. We align these instruments with OECD guidance and the Código País to create consistent parameters across affiliates.
Our approach helps companies translate group codes into subsidiary procedures that meet regulator and market expectations. This improves management clarity and auditability.
Practical steps include defining escalation paths, documenting disclosure and investor relations rules, and tailoring policies to local legal tests while keeping group ethics intact.
- Ensure consistent information flows to shareholders and regulators.
- Adopt a documented governance code referencing the Country Code.
- Schedule periodic reviews to respond to regulatory change and market shifts.
Defining the right governance structure for group companies
We created a harmonized model so bylaws, board rules, and a single group agreement travel with each affiliate. This ensures consistent oversight and uniform expectations across companies.
Bylaws, board rules, and agreements that travel
GEB established bylaws, Rules of the Board of Directors, a Corporate Governance Code, a Group Agreement, and committee rules.
- We drafted bylaws that codify board powers, decision thresholds, and member duties so the document applies at each company.
- We set clear rules of the board that define the roles of directors, the chair, committees, and meeting protocols.
- We designed a group agreement to harmonize related‑party rules, conflict handling, and disclosure expectations across the group.
- We implemented formal onboarding and ongoing training for board directors and members to align local management and group practices.
- We recommended independent committee chairs, regular evaluation cycles, standardized agendas, and reporting packs to improve oversight.
Result: boards operate with clearer mandates, faster escalation paths, and documented exceptions that include remediation timelines. This structure raises confidence and supports consistent decision-making across every company we advise.
Ultimate beneficial ownership: UBO registry duties and control disclosures
Identifying real owners has become a core compliance task that affects reporting and enforcement. We outline clear steps to meet UBO registry duties and align filings with public trade register rules.
UBO thresholds, control criteria, and DIAN’s electronic filing
Thresholds: Individuals with 5% or more ownership or voting rights must be identified. Separate control criteria capture indirect influence over a company’s assets and decisions.
Filing duties: DIAN requires electronic submission. New entities must file within two months of incorporation. When no qualifying individual exists, register the legal representative or the person with higher management authority.
Business group and control registration under Law 222/1995
Law 222/1995 demands public trade register disclosure of business groups and control chains up to the final parent. The Superintendence clarified ownership‑chain detail and allowed voluntary updates with reduced fines in 2021.
- Map full ownership chains to the final parent to avoid sanctions and regulator scrutiny.
- Keep UBO information accurate and complete to support AML and anti‑corruption analytics year over year.
- Adopt a governance checklist that schedules UBO updates, document retention, and shareholder attestations.
| Item | Requirement | Timing |
|---|---|---|
| UBO threshold | Identify persons ≥5% ownership or control | Continuous; update on changes |
| DIAN filing | Electronic submission of beneficial information | New company: within 2 months of incorporation |
| Group disclosure | Register ownership chain to final parent in public trade register | As required by filings; update voluntarily to reduce fines |
Practical step: require periodic internal audits of UBO and group disclosures, and include code references that mandate timely corrections when ownership changes occur. This reduces disputes during audits and strengthens trust with shareholders and regulators.
Conflicts of interest and related-party safeguards we must adopt
We describe practical procedures that require timely disclosure of any interest affecting management decisions.
Decree 46/2024 requires administrators to disclose any direct or indirect interest that could compromise independence. When a proposed transaction may still benefit the company, shareholders may authorize it after full disclosure.
Decree procedures, shareholder authorizations, and prohibitions
We recommend a standard notice, a written record of rationale, and an advance vote when conflicts arise. The decree also limits contracting with controlling entities or their subsidiaries unless approval is secured.
Derivative actions and accountability of administrators
Derivative actions let shareholders pursue damages for breaches of duties. We advise codifying these remedies in the governance code and keeping a register of related parties and periodic attestations from administrators.
- Document disclosures and board rationale to support the business judgment rule.
- Train management on recusal and escalation paths to the General Meeting.
- Review measures regularly to align with pending legislative changes.
| Topic | Action | Timing |
|---|---|---|
| Disclosure | Written notice to shareholders and board | Before approval |
| Authorization | Shareholder vote when interest present | Pre-transaction |
| Accountability | Derivative action option and records | Ongoing; allow claims after breach |
Board composition, independence, and diversity standards for better decisions
Effective board composition turns diverse perspectives into better decisions and clearer oversight.
We recommend clear independence baselines and measurable standards. Listed entities must hold at least 25% independent directors. We urge private companies to adopt the same floor or to set higher targets.
Independent directors, skill mix, gender diversity, and the 30% initiatives
Initiatives such as the 30% Club and CESA’s program increased female board membership from ~15% in 2015 to over 25% by 2025.
We found that a mix of sector expertise and independent judgment improved oversight and strategic debate.
Board onboarding, evaluation, and committee support
We implement structured onboarding that covers strategy, risk, regulatory duties, and management interfaces. This helps new board directors move quickly to value-add roles.
- Independence: meet or exceed the 25% threshold where applicable and build a pipeline of independent candidates.
- Diversity: recruit members across skills, sectors, and gender to lift decision quality.
- Evaluation: combine self, peer, and management feedback to strengthen board practices.
- Committees: Audit & Risk, Governance & Sustainability, Finance & Investments, Compensation—each chaired by independents.
- Policies: define role descriptions, meeting cadence, and information needs; update them periodically.
«Diverse and independent boards make more robust decisions and gain stronger validation under the business judgment rule.»
Audit and risk oversight: audit committees and the statutory auditor’s expanding role
We set out how audit bodies must connect board oversight to day‑to‑day risk and compliance work. Clear mandates help directors and management act on timely information and meet legal requirements.
Committee mandates for financial information, ethics, and risk control
We require an audit committee to oversee the integrity of financial information, ethics frameworks, and enterprise risk controls. Listed companies must seat three directors, including independents, and invite the statutory auditor to key meetings.
We recommend a charter that spells out duties, authorities, reporting lines, and coordination with other committees. Short reporting cycles and remediation timelines keep the company responsive.
Statutory auditor responsibilities on AML, transparency, and alerts
The statutory auditor now reviews AML and transparency programs and reports suspicious operations to authorities. Where relevant, auditors must alert shareholders to unfair competition or conflicts that affect company value.
- Define information flows from management to the committee and board.
- Integrate AML and transparency work into the auditor’s scope and procedures.
- Require periodic risk assessments and internal audit plans tied to strategic risks.
- Provide director training and annual reviews of committee performance.
«Strong audit oversight links accurate reporting to better decision-making and stronger investor trust.»
The business judgment rule: enabling informed, good-faith risk-taking
We clarify the protections that let boards take measured risks without fear of hindsight review. New regulations officially accepted the business judgment rule already recognized by case law. Directors who act in good faith, with information and within their authority gain legal protection.
What we recommend: document decisions with information packs, risk analysis, expert inputs, and clear minutes. Calibrate board agendas so complex decisions get enough time and outside advice when needed.
Governance practices such as independence, diversity, and conflict controls strengthen the rule’s shield. Training on regulatory expectations and bylaws helps management align choices with permitted scope.
- Use a high‑risk checklist with scenarios and stakeholder impacts.
- Communicate rationale to shareholders and record expected outcomes.
- Review decision practices periodically to reduce litigation risk.
| Element | Action | Impact |
|---|---|---|
| Documentation | Info packs, minutes, risk memos | Evidence of informed decisions |
| Board process | Calibrated agendas, expert input | Better strategic decisions |
| Training | Regulation and bylaws refresh | Aligned management actions |
«Consistent application of these practices enhances trust and reduces second-guessing by authorities.»
ESG and sustainability reporting: what unlisted and listed companies should prepare
We now face a new reporting era where sustainability data joins financial filings as routine management information.
In March 2025 the Superintendence issued guidance that introduces a Sustainability Report and optional Non‑Financial Information for 2025 filings. Entities with assets or income above ~USD 13 million, and sectored firms above ~USD 9.7 million, fall within scope.
New sustainability and non-financial information guidelines
Listed companies must disclose social and environmental metrics aligned with international standards. They should explain how sustainability practices integrate into communications and operations.
Sector thresholds, international standards, and quarterly change disclosures
We recommend adopting global standards now to boost comparability for investors and regulators. Quarterly reports must flag material changes to disclosed data when practices or risks shift.
- What to include: governance and business practices, material metrics, methodologies, and boundaries for each disclosure.
- Scope & timing: check thresholds early to confirm 2025 filing duties and avoid last‑minute fixes.
- Data ownership: assign cross‑functional teams to collect, validate, and audit sustainability information.
- Board oversight: align disclosure with a Governance & Sustainability committee and a code‑aligned data assurance approach.
- Why act early: early adoption improves readiness, investor trust, and can reduce long‑term impact on dividend expectations.
«Clear, auditable sustainability information enhances credibility and supports better capital and dividend decisions.»
Practical step: document methodologies, keep versioned boundaries, and build quarterly workflows so disclosure is accurate, timely, and audit ready.
ESG due diligence in M&A and group transactions
Effective ESG due diligence turns hidden liabilities into manageable negotiation points. We treat environmental, human rights, and community safeguards as deal drivers that shape price, indemnities, and covenants.
Environmental, human rights, and community safeguards that alter deal terms
Investors increasingly demand ESG checks to protect reputation and value. In local property and infrastructure deals, displacement, permitting, and social impacts are frequent review areas.
Global standards also affect representations and warranties. Multi‑jurisdiction transactions often change price allocation and post‑close indemnities when ESG exposure appears.
- Prepare data rooms: collect permits, impact studies, and remediation plans so teams can price risk promptly.
- Adopt clear policies and code references: set group minimums for targets and disclosures to speed approval cycles.
- Screen early: run environmental site assessments, rights reviews, and community risk checks to avoid closing delays.
- Use experts: hire third‑party specialists for resettlement and complex permits.
| ESG issue | Due diligence focus | Effect on transaction |
|---|---|---|
| Environmental liabilities | Phase I/II studies; permits; remediation plans | Price adjustments; escrow; indemnities |
| Human rights & displacement | Stakeholder mapping; resettlement plans; legal exposure | Covenants; conditional closing; post‑close obligations |
| Community impact | Consultation records; benefit sharing; grievance mechanisms | Reps/warranties; integration actions; monitoring |
We recommend integrating ESG findings into integration plans and board reporting. Strong governance and consistent information across the group improve negotiation positions and support investor confidence and long‑term dividend narratives.
Shareholder rights, disclosure, and information access that build trust
We set clear standards that protect shareholders’ access to timely, reliable company information. GEB implemented 100% of the Código País measures for General Meetings and keeps an active Investor Relations team to speak with investors and markets.
General Meeting rules, investor relations, and equal treatment
We explain practical meeting logistics, agendas, and voting frameworks that reduce disputes and show respect for shareholders’ rights.
Our code and disclosure policies require prompt responses to information requests and clear formats for records. Management must answer within defined timeframes.
- Affirm shareholders’ rights to timely materials and fair participation.
- Provide remote participation options and strong documentation of meetings.
- Maintain regular investor updates on financial and non‑financial performance.
- Publish minutes and resolutions to improve accountability.
- Align disclosure practices with the code so dividend expectations stay realistic.
We review meeting practices regularly and encourage board engagement with shareholders on strategy, always within established governance boundaries.
Dividends and governance: how stronger practices influence payout
We connect better board practices and disclosure to clearer dividend outcomes. Research shows that adherence to the Country Code and higher quality index scores often align with larger, more stable payouts.
Why this matters: the Colombian Commercial Code (Article 155) sets default dividend rules but allows exceptions by supermajority. When companies adopt the code and score well on indices like IGCCP, agency costs fall and shareholders gain confidence.
Country Code adherence, quality indices, and payout implications
We find that transparent information and documented rationales make dividend announcements more credible. This improves market reception and can attract long-term investors seeking steady income.
«Higher governance quality is positively associated with higher dividend payouts,» academic literature notes.
Practical steps we recommend:
- Document dividend rationale in meeting materials to inform shareholders and reduce disputes.
- Review payout policy periodically against business needs and peer code adoption.
- Benchmark code compliance metrics to understand payout positioning and investor expectations.
| Area | Action | Effect |
|---|---|---|
| Code adherence | Publish compliance score and minutes | Higher payout credibility |
| Disclosure | Explain dividend rationale and forecasts | Better market reception |
| Benchmarking | Compare peers on quality indices | Informed payout strategy |
We also suggest teams review executive pay alignment and shareholder engagement when setting payouts; see our executive compensation guide for related planning steps.
Compliance and enforcement: what Colombian authorities were prioritizing
Since April 2024, we saw a clear shift toward active enforcement. Regulators moved from passive record keeping to coordinated action that tests whether firms meet new requirements and protections.
Data-sharing between DIAN and the Superintendence
In April 2024 DIAN and the Superintendence signed an agreement to share UBO data. This measure helps identify decision‑makers and strengthens AML and anti‑corruption controls.
Inter‑agency data flows increased detection of non‑compliant companies and improved official control over financial crimes.
Sanctions tied to transparency, conflicts, and financial reporting failures
Authorities prioritized disclosure accuracy, conflict handling, and timely financials. Failures now bring fines, investigations, and reputational damage that affect market access and dividend capacity.
- We recommend a compliance calendar and internal controls to meet regulations and limit risk.
- We advise management certifications of filings and periodic audits focused on UBO accuracy and group disclosure.
- We suggest clear escalation paths to the board and protocols to remediate and communicate with authorities.
| Enforcement focus | Action | Impact |
|---|---|---|
| Transparency | UBO updates & disclosure checks | Reduced regulatory risk |
| Conflicts | Certify and record approvals | Stronger management accountability |
| Financial reporting | Timely statements and audits | Protection of reputation and dividend delivery |
For practical reference on aligning group measures with local standards, consult the OECD report. We emphasize training, documented controls, and KPIs that tie compliance to executive performance.
Group-wide policies for subsidiaries: consistency, ethics, and risk control
We set group policies that standardize board selection, statutory auditor appointments, and related‑party approvals across every affiliate.
Our code defines clear practices for elections, disclosure, and conflict handling so each company follows the same ethical baseline. This reduces ambiguity and supports timely compliance.
Corporate governance codes, related-party rules, and disclosure policies
We require related‑party rules with thresholds, mandatory approvals, and periodic reporting to the board and shareholders. These steps make transactions transparent and auditable.
- Adopt a group governance code to align practices and risk control across companies.
- Standardize disclosure policies so information quality and timeliness match group standards.
- Define directors’ and management roles to clarify accountability and escalation paths.
- Use a centralized repository and regular training to embed practices across the group.
- Run integrated risk assessments and periodic reviews to update policies after regulatory change.
Result: consistent policies raise credibility, ease audits, and help directors make objective decisions that protect shareholders.
Implementation roadmap: practical steps for subsidiaries operating in Colombia
Our roadmap begins with clear, sequenced actions that turn policy into practice quickly.
Prioritizing UBO, conflict procedures, board upgrades, and ESG reporting
First, map UBOs and control chains, then file with DIAN and update public registries. This step meets electronic filing requirements and reduces enforcement risk.
Second, implement Decree 46/2024 measures: conflict registers, recusal rules, and shareholder authorization workflows. We embed these into the company code and training.
- Upgrade boards: add independent directors, diversity targets, and clear committee charters.
- Strengthen audit and AML processes and align the statutory auditor with oversight duties.
- Prepare non‑financial reporting with data governance, controls, and quarterly routines.
«Sequenced adoption and measurable KPIs let management show progress and protect dividend predictability.»
| Priority | Action | Timing |
|---|---|---|
| UBO registration | Map owners; DIAN filing; registry updates | 0–3 months |
| Conflicts (Decree 46/2024) | Registers; recusal; shareholder approvals | 1–4 months |
| ESG reporting | Data governance; templates; assurance | 3–9 months |
Finally, we assign measures, milestones, and KPIs, embed practices into the code, and coordinate with group headquarters to harmonize resources.
Strengthening governance to enhance performance, protection, and investor confidence
We conclude that stronger governance drives tangible impact on company resilience and decision quality. Clear oversight reduces mistakes, lowers risk, and helps group companies avoid sanctions.
We protect shareholders by defining rights, enforcing conflict rules, and improving disclosure. Better corporate governance also reassures investors and supports lower cost of capital through clearer signals.
Adopting consistent policies shapes market perception and boosts access to capital. The rules and code adoption directly affect sustainable dividend decisions and long‑term valuation.
Our recommendation is simple: keep improving policies, run periodic independent assessments, and train directors and management. These practices turn governance into a strategic asset that attracts capital and supports resilient growth.
