It goes without saying that your business rated on the Broad Based Black Economic Empowerment scorecard creates more opportunities with both the government and private sector.
Under the current Codes, the number of elements in the B-BBEE Generic Scorecard will be reduced from 7 – Ownership, Management Control, Employment Equity, Skills Development, Preferential Procurement, Enterprise Development, Socio-Economic Development to 5 as follows:
1. Ownership
This measures the equity that black people hold in the business according to their voting rights, economic interest (including entitlement to dividends, capital gains and other rights of shareholders) and realisation points (the accumulation of net economic interest in the hands of black shareholders). The number of points allocated to this element will increase from 20 to 25 under the revised Codes.
2. Management Control
This element will be consolidated to include Employment Equity from the existing code. Management Control measures the extent to which black employees participate at the Board level and are employed in senior management positions. Employment Equity measures the percentage of black staff employed in the business. The number of points allocated to this element will increase from 10 to 15 under the revised Codes.
3. Skills Development
This element measures the extent to which the company has invested in the development of skills among black employees. The points allocated to this element will increase from 15 to 20 in the revised Codes, an illustration of the increased importance assigned to skills development in the new codes.
4. Enterprise and Supplier Development
Preferential Procurement, which is one of the elements in the existing Codes, will be merged with Enterprise Development to form the revised element of Enterprise and Supplier Development. This amended element will measure the extent to which a company uses the services of black-owned or B-BBEE compliant businesses, and provides business development support to such businesses. It will be based on the empowerment level of the businesses that are supported and the businesses that are the suppliers. Some 40 points will be allocated to this element, an increase of 5 points from the Enterprise Development and Preferential Procurement elements in the existing Generic Scorecard. This is an indication of the increased emphasis that will be placed on enterprise and supplier development.
5. Socio Economic Development
This element measures the investment that a company makes in uplifting black individuals, communities or groups, mostly through charitable means. The number of points allocated to this element will remain unchanged at 5 points.
In order to take advantage of these opportunities, entrepreneurs will need to acquaint themselves with the details of the new B-BBEE framework and position themselves as companies of choice for large companies that are seeking to boost their B-BBEE credentials. As such, it is important to consider a BBBEE strategy that suits your business, vision and specific needs best.
