PARTNERS MUST ADD VALUE
AJAY LALU, a partner at Bravura Economic Empowerment Consulting, says companies will for a long time to come continue to do deals with potential shareholders that they believe can add value to their business.
Lalu says the challenge is to broaden the base of potential beneficiaries so that the same names and faces don’t keep emerging.
However, Lalu says there’s already been a shift away from the usual sus- pects. “When last did you see Tokyo Sexwale, Patrice Motsepe or Cyril Ramaphosa’s Shanduka announcing an empowerment deal?”
Overall, Lalu says the market has become sufficiently aware of the need to broaden participants.
There’s also an incentive provided in the Black Economic Empowerment Codes, giving companies an additional point for including players who haven’t previously participated in major deals.
Though staff empowerment deals have been few and far between, the inclusion of employees is almost always lauded as giving a company’s building blocks a say in its running.
But Lalu doesn’t believe that staff deals are always a good thing. In large companies the share allocation often turns out to be too small to act as a meaningful retention mechanism.