When Fiduciary Duty Collides with Politics: The Los Andes Copper Case

Last Tuesday, January 2oth, Canadian mining company Los Andes Copper became the protagonist of an episode that has been labeled as “reckless” by Arturo Squella, president of Chile’s Republican Party. The company issued a press release announcing that its CEO, Santiago Montt, was resigning to become Minister of Mining in José Antonio Kast’s incoming government—hours before the president-elect was scheduled to officially announce his cabinet. The result: Montt was dropped from the list, and Daniel Mas ended up assuming the dual role of Minister of Economy and Mining.

The prevailing interpretation has been that the company made a communication blunder, a public relations gaffe that cost its own executive his appointment. But there is an alternative reading—one less politically convenient, yet more rigorous from a corporate governance standpoint: the board of Los Andes Copper did exactly what it was supposed to do.

The Regulatory Straitjacket

Los Andes Copper is not a Chilean company. It is a Canadian corporation listed on the TSX Venture Exchange (TSX-V), subject to the stringent disclosure requirements of the Canadian capital markets. TSX-V Policy 3.3 is unambiguous: material information must be disclosed “immediately after management of the issuer becomes aware of its existence.”

Is a CEO’s resignation material information? Undoubtedly. It is information that could reasonably affect the stock price. Was there already knowledge of this information? Multiple Chilean media outlets had reported the appointment throughout the morning. Montt’s name was circulating in the political “leaks” that Squella himself now criticizes.

Herein lies the board’s dilemma: if the information was already seeping into the market through informal channels, withholding the official announcement would expose the company to accusations of information asymmetry—or worse, of facilitating insider trading. The directors faced a binary choice: comply with the financial regulator or wait for the president-elect’s blessing.

Independence That Unsettles

They chose the former. And that, paradoxically, is exactly what we expect from a board with properly functioning independent directors.

Board independence is not a decorative attribute that gets activated only when convenient. It is a fiduciary duty that obligates directors to prioritize the interests of the company and its shareholders above any other consideration—including the political convenience of an incoming government.

The Los Andes Copper announcement can be read as a lack of “fine-tuning” with the protocols of the transition office. But it can also be read as evidence of a corporate governance structure that did not yield to implicit pressures to subordinate its legal obligations to the timing of political ritual.

The Collision of Two Worlds

What we witnessed on Tuesday was not a management error but a collision of protocols. Capital markets value transparency, immediacy, and information symmetry. High politics values discretion, the symbolism of official announcements, and control of the narrative. These are incompatible logics.

A board more experienced in the complexities of the Chilean market might have coordinated a trading halt—a temporary suspension of transactions—to synchronize the market clock with the political clock. That would have been the optimal technical solution. But the absence of that coordination does not turn the board’s decision into an act of recklessness; it makes it, at most, an act of imperfectly executed regulatory compliance.

The Uncomfortable Lesson

There is irony in this episode. The same sectors that celebrate the arrival of a pro-investment, pro-mining government should recognize that Los Andes Copper’s behavior is exactly the type of technical institutionality that attracts foreign capital. Companies listed on developed markets operate under a regulatory “straitjacket” that is often misunderstood—or ignored—by local political actors.

If we want Chile to be an attractive destination for foreign mining investment, we must accept that those companies will answer first to their regulators and shareholders, not to the courtesy protocols of the presidential palace. That is not an affront; it is simply how serious capital markets work.

The cost to the Vizcachitas project remains to be seen. The relationship with the new government started off on the wrong foot, and obtaining the required social and environmental permits will now demand an additional effort to rebuild trust. But the board of Los Andes Copper can at least look in the mirror knowing it fulfilled its fiduciary duty.

In corporate governance, that is called independence. Even when it hurts.