We often hear that B-BBEE is only meant for a select few individuals and that it doesn’t really serve its purpose. There are possibly some individuals that benefit more than others when we only take the Ownership element on the B-BBEE scorecard into account. There’s still a perception that Ownership is everything. We tend to forget that Ownership is only one of the elements on the entire B-BBEE scorecard.
As a business owner, you can decide where you want to make the most significant difference and even benefit from it as well. Yes, you can be the ultimate beneficiary in terms of B-BBEE.
If we look past the Ownership element, it’s easy to realise that your Skills Development, Enterprise and Supplier Development, as well as your Socio-Economic Development contributions, can potentially make a huge difference in many people’s lives and not only the so-called “select few”. Yes, Ownership plays an important role, but once again, you, as the current owner, can decide if and how you want to address this element.
Before we discuss Ownership, let’s have a look at Skills Development and Enterprise and Supplier Development first.
Skills Development
The beneficiaries in terms of this element are Black People and/or Black Employees. In terms of the B-BBEE Act, Black People include African, Coloured and Indian people who are South African citizens. Therefore, a Black person living in a rural area can qualify as a beneficiary in terms of this element. It is certainly not limited to just a select few.
Skills Development possibly provides the biggest platform for entities to make a meaningful contribution to the lives of others. By equipping somebody with skills, they can utilise them to move forward in life. Indirectly you are also contributing towards the economy at large. The more skilled people there are, the more productive we can operate as an economy.
So, how can you benefit from this element?
By investing in the skills of your employees, you are ensuring a better-skilled workforce. This, in turn, will increase productivity and, eventually, your bottom line. Yes, you will spend time and money on somebody else, but your business will be able to benefit from this in the long run. Furthermore, if you invest in somebody who can potentially be promoted to a management position, it may also contribute towards a better Management Control score should it eventually happen.
Enterprise and Supplier Development
In terms of the Enterprise and Supplier Development element, you can assist other black-owned entities in various ways. From grant contributions to personal assistance in the form of time spent with these beneficiaries. Just like with Skills Development, your own business can eventually also benefit from this. In fact, you can have so much control over the assistance provided that you can create a supplier according to your own needs.
Firstly, in terms of Enterprise Development, you can assist somebody to start a business and find their feet in which they will ultimately operate. Secondly, in terms of Supplier Development (apart from your actual assistance), you must also procure from this very same entity. You can elevate the beneficiary entity from an Enterprise Development beneficiary to a Supplier Development beneficiary once you are satisfied with the standard of the product produced or service rendered.
The idea is not to provide a meal ticket for life but to provide an entity with the opportunity to become self-sustainable in the long run. By correctly implementing these initiatives, you can eventually create a supplier who complies with your standards. Furthermore, by procuring from this entity, you ensure a more favourable Preferential Procurement score which in turn will benefit you as well. Not only do you score B-BBEE points, but you benefit by making use of a quality supplier.
Ownership
As stated above, you, as the current business owner, can decide if and how you want to address this element. If, for example, you decide to include your employees in the ownership structure that you envision implementing, the business as a whole can eventually benefit from this transaction. Where employees realise that it’s to their own benefit for the business to perform optimally, you indirectly improve productivity and create a loyal workforce.
It is clear from the above that B-BBEE is definitely not only intended for a select few. You can decide who should benefit. When done properly, you, the business, will ultimately be the biggest beneficiary in terms of this government policy.
We are also well aware of the fact that time is money. It is not always possible to invest a lot of time in implementing these initiatives.
Contact your SEESA BEE Legal Advisor to assist your business with any B-BBEE Scorecard Elements. Alternatively, SMS the word “SEESA” to 45776 for an expert legal advisor to contact you.
About the author:
Bernard du Preez started at SEESA as a B-BBEE legal advisor and currently holds the position of Provincial BEE Manager at the SEESA Cape Town branch. He is an admitted attorney who completed his B.Com (Law) and LLB degrees at the University of the Free State.
Resources:
- The Broad-Based Black Economic Empowerment Amendment Act, Act 24 of 2013
- Codes of Good Practice issued in terms of Section 9(1) of the B-BBEE Act