Firms must do more to push BEE
COMPANIES are doing an immense amount to implement black economic empowerment (BEE) and transform their organisations, but at the same time companies need to do more to implement BEE and transform their organisations.
Speaking to transformation officers at companies, you can’t help but be impressed by the strides made in implementing and promoting BEE. Here the categories that make up the BEE scorecard are crucial.
Dig deeper into the amount they contribute to socioeconomic development, the number of small businesses they have assisted in starting up, the resources they have committed to skills training and development for employees, and the numbers are staggering. Those elements form the “broad-based” nature of BEE, with ownership and management control the more visible – and politically controversial – categories.
In theory, these span a coherent value chain leading to deep economic empowerment. An ideal example illustrates how this could work. Imagine a school in an underprivileged area that receives funding and assistance, while promising pupils bursaries through a company’s socio-economic development programme.
Opportunity
Both the improved level of schooling and opportunity for post-matric study improve the pupils’ capabilities, enabling them to be employed by the sponsoring company, so increasing a company’s employment equity. Skills training then elevates the employee, opening the potential to move into management.
Only a small percentage can move into management or ownership, but those who don’t can receive support from the company to start their own businesses, boosting the sponsoring company’s enterprise development score. Along the way the company is scoring points across the empowerment scorecard.
In theory it fits snugly. In practice there are many points of breakdown – although some companies have made it work better than others.
The points of breakdown are caused both by businesses themselves and government, particularly because of its propensity to keep changing the goalposts.
Fronting by white businesses is the most high-profile breakdown point. Other criticisms generally relate to a company not doing enough to train and promote black employees into management, and a lack of transformation on the ownership front.
Businesses – not all, but certainly many in the middle to bottom end of the rankings – are often guilty of a tick-box approach to BEE compliance, ensuring respectable scores but changing little under the surface. For example, skills training may focus narrowly on one job activity, so that it prepares the trainee for nothing else.
Rather, such programmes should incorporate a range of skills so that the trainee is able to move into other areas of a business. And of course, potential management candidates should be identified and offered management training.
It’s a question of being a bit smarter so that the company benefits in its entirety.
Greater good
While there are many shortcomings within the BEE matrix, this survey serves as much as a celebration of the success of BEE as it does a critique of its shortcomings.
The repeated refrain from empowered companies is that for them it is not a compliance issue, but something they sincerely believe in because it improves the business’s financial prospects and is for the greater good of the country. That certainly offers hope for the future of transformation in South Africa.