An Introduction to Broad-Based Black Economic Empowerment

Empowerment in South Africa is an evolving process. The rules are being written by and through our actions, making it difficult to define “best practice”.

There are no right or wrong approaches; the best approach is often dependent on the context of the company. To add to this situation, empowerment is badly labelled and poorly understood. It is complex and its success is dependent on many interdependent factors.

Take into account as well that organisations are often confused about what they are trying to achieve when it comes to empowerment.

Does B-BBEE apply to you and why should you implement it?

B-BBEE applies to everyone. Each and every person has a role to play in transforming our country, irrespective of his or her skin colour.  If sustainable transformation happens successfully in our companies and our country, everyone will benefit. Simply put if we don’t get this right our country, in the form we know it to be today will disappear.

However, in terms of the B-BBEE requirements of your customer, you will be very clear of the importance of implementation based on the number of queries you receive relating to your own company’s B-BBEE scorecard. For many companies in the country the ability to produce a strong B-BBEE scorecard is a critical requirement from their customers.

Most people see the process of empowering an enterprise as coming at a cost and impeding the performance of the business. However, this limited view leads to “points buying” in an attempt to improve the B-BBEE scorecard result. This presents an unhealthy and limited view of how to manage empowerment. If empowerment is implemented in a way that costs your business, it reduces your growth and your ability to employ more people. Collectively this would place South Africa in a negative spiral thereby eroding the productive capacity of our nation.

A more accurate view would be to understand how B-BBEE could fit in and directly further the strategic objectives of one’s business so that empowerment provides a positive return on investment. This document will attempt to describe how one might go about achieving this.  

The official definition of BBBEE:

Empowerment has been defined by the government and the Department of Trade and Industry as: “an integrated and coherent socio-economic process that directly contributes to the economic transformation of South Africa and brings about significant increases in the number of black people that manage, own and control the country’s economy, as well as significant decreases in income inequalities.”

Source: South Africa’s Economic Transformation: A strategy for Broad-Based Black Economic Empowerment (www.dti.gov.za )



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