PIRC considers that in order to protect minority interests at companies with a controlling shareholder, the Chairman of the board and a majority of the board as a whole should not be connected to the controlling shareholder. The structure at Compania Cerveseria Unida does not meet the above guidelines. The Chairman Craig Guillermo Luksic is member of the Luksic family, the controlling shareholder of the company through its holding in Quiñenco SA. Quiñenco SA. is a 50% holder and the controller of Inversiones y Rentas SA ("IRSA"), which is the majority shareholder of the company, through an agreement with Heineken Chile Limitada, a subsidiary of the Heineken group. Overall 7 directors out of 9 (approximately 78% of the board) are connected to Quiñenco, Heineken, or IRSA.

We note that under Chilean law there is no legal obligation for companies to have independent directors. However, Chilean law establishes a number of principles of general applicability designed to avoid conflict of interests. The company states that pursuant to NYSE Rule 303A.00, the company is entitled to follow Chilean practices and thus it is not required to have a majority of independent directors.

In our view, the board structure at Compania Cerveseria Unida raises concerns as to whether the interest of minority shareholders are adequately taken into consideration by the board.