B-BBEE, Another box-ticking exercise?

While the Codes of Good Practice have been in practice for over 10 years which is more than enough time for entities to put in place efforts to bring transformation, they have never been as difficult to comply with as they are now.

The New Codes are as difficult to comply with for black-owned companies as they are for non-black owned entities. Traditionally, small and black-owned companies have tended to drift towards informal operations management which includes informal human resources practices. Whether it’s not having employment contracts in place, not having a documented Payroll system or HR Policies in place; this now makes it difficult for these companies to comply.

It is no longer enough to have black ownership, there is more and more pressure to have female ownership in an effort to advance the interests and participation of women in the economy. The full throttle with which government is implementing this is evident in the new JSE Regulations which require that listed companies have a Gender Policy and Report.

While the idea is to encourage more black and female ownership and participation, this alone is not enough and companies need to place a lot more thought and effort into their internal practices such as Enterprise & Supplier Development, Training and Socio-Economic initiatives. B-BBEE has become a box-ticking exercise for some entities who sometimes outsource the management of their Training, Socio-Economic and Enterprise Development spend to external companies. It is a spend that entities cannot get away from but what outsourcing actually does is deprive the company from the ability to build capacity internally to manage their own scorecard.

his leaves them overly reliant on external parties during verification, failing to identify their own spend and categorise it correctly in order to reap the maximum points from their spend. Verification agencies can testify to how little B-BBEE is understood from the lower ranks in charge of the implementation and administration, to the senior management responsible for the strategy. Regardless of whether businesses agree with the principles or practicalities of B-BBEE; it is an unavoidable part of conducting business in South Africa. The only way to truly implement transformation is for companies to grow capacity internally and learn how to manage their own scorecard and all related initiatives.

We see too often companies who outsource learnerships to external training providers. These learnerships are merely another box-ticking exercising. These learners are often hosted offsite and never actually get the opportunity to visit their donor company or experience their culture or any workplace training. While this type of model is helpful for companies who want to implement skills development initiatives but lack the resources to host them on their premises and manage the learnerships themselves, it often ends up in a detached programme that the donor company does not actually get involved in.

The same can be said for Socio-Economic initiatives where companies make cash donations in order to meet their targets instead of using it as an opportunity to encourage employee participation and volunteerism which has a positive impact of employee engagement and morale. Yes we can meet the targets, we can put the funds in the right baskets to ensure points for those elements and tick all the boxes; but with all the spend it actually translates to, it is so much more than a compliance exercise. Implemented correctly B-BBEE can actually benefit a wider audience, improve & help define the companies culture and improve the company’s image and status as a Good Corporate Citizen.

How can we help you?

Contact us at the Hervest BEE CA Inc office nearest to you or submit an inquiry online.