Businesses that comply with BBBEE regarding the pillars will be rated high on the bee scoreboard/ may get government tenders/may attract other BBBEE business partners or suppliers
Encourages businesses to address the demand of redress/equity directly
Provides for human resources development through training and development
Promotes enterprise development, by developing entrepreneurial skills for designated people to start their own businesses
Businesses will have a good overview on how its performing in comparison to other businesses in the rest of the country
By focusing on BBBEE the business will show commitment towards the social/education/economic development in the community/country
Once rated the business will understand how to develop BBBEE strategies that will increase BBBEE ratings on an annual basis.
Fronting is discouraged, as it may lead to the disqualification of a business,s entire scorecard/BBBEE status.
Share prices BBBEE compliant business are likely to increase as they attract more businesses
Businesses that support small micro, medium enterprises [SMMES] may increase their own BBBEE ratings
Complying with BBBEE requirements give a businesses experience/exposure to be able to provide better employment opportunities/staff development
NEGATIVE/DISADVANTAGES
Businesses that want to do businesses with the government must have their own BBBEE assessed annually.
Processes may lead to corruption/nepotism if not monitored properly.
Investment/ownership issues can cause unhappiness amongst existing shareholders/owners.
Businesses have to go through the processes of having their own BBBEE compliance measured/verified by an independent BEE verification agency
Provides for preferential procurement so certain businesses may be excluded from supplying goods/services.
DISCRIMINATORY ACTIONS ACCORDING TO BBBEE
Failing to implement affirmative action to meet BBBEE responsibilities
Promoting unsuitable people into management position at the expense of qualified pdps
Refusal to award tenders to black suppliers who are bee compliant
PENALTIES FOR NON COMPLIANCE WITH THE BBBEE
Businesses may face imprisonment for non compliance and fronting practices
The penalty could be a fine of up to 10% of the company annual turnover
A business can be banned from participating in government contracts for a period of ten years
Business licence may not be renewed and authorisation may not be issued
Government will cancel any contracts awarded that was based on false information regarding BBBEE status
Businesses that fail to achieve at least a minimum 40% of compliance with ownership skills development and new enterprises and supplier development will automatically downgraded the by on e level
WAYS IN WHICH BUSINESSES CAN COMPLY WITH BBBEE
Businesses must appoint black people in managerial positions
Businesses must sell shares to black employees/people
Send black people for black skill development training
Outsource their services to BEE compliant suppliers
Implement affirmative actions when making appointments
Develop small business/ SMEs through enterprise development
Improve the standard of living of the communities in which they operate
BBBEE COMPLIANCE
OLD PILLARS
REVISED PILLARS
MANAGEMENT
MANAGEMENT CONTROL
EMPLOYMENT EQUITY
SKILLS DEVELOPMENT
SKILLS DEVELOPMENT
OWNERSHIP
OWNERSHIP
PREFERENTIAL PROCUREMENT/SUPPLIER DEVELOPMENT
ENTERPRISE AND SUPPLIER DEVELOPMENT
ENTERPRISES DEVELOPMENT
SOCIAL RESONSIBILITY
SOCIO-ECONOMIC DEVELOPMENT/SOCIAL RESPONSIBILITY
According to the Revised BBBEE pillars, five key areas of compliance are used to measure a businesses compliance to BBBEE. These are
Ownership: points are earned by selling shares to black people Management Control: points are earned by appointing black top managers and directors Skills Development: points are earned by training employees through on the job training or formal training Enterprise and Supplier Development: points are earned by assisting smaller black owned businesses to grow Socio economic Development: points are earned by supporting black social causes.
IMPLICATION OF BBBEE PILLARS ON BUSINESSES
MANAGEMENT CONTROL
Appoint black people in senior executive positions/management
Ensure black female representation in management
Implement transformation at all levels of management
Ensure that black people are involved in decision making process.
Business must ensure that transformation is implemented at all
levels.
Businesses are directly penalised for not implementing this pillar.
SKILLS DEVELOPMENT
Business must engage black employees in skills development initiatives
Provide learnership and learning programmes to black people
Business must contribute 1% of their payroll to fund the skills development programme
Business benefits from the increased pool of skilled/trained workers
Business must go extra mile to train staff where learnership are not offered
Productivity is compromised as mentors/coaches have to find to participate in learnership/training
OWNERSHIP
Business should include black people in shareholding/partnership/franchise
Exempted micro enterprises (EMES) with an ownership of 50% or more of black people are promoted to level 3 of the be scorecard
More opportunities are created for black people to become owners /entrepreneurs.
Encourage small black investors to invest in big companies and share ownership.
Large business should form joint ventures with small black owned businesses and share businesses risks
Business sometimes find it difficult to locate suitable black business partners/shareholders
Many black people cannot afford shares in companies/contributions to partnership
ENTERPRISE AND SUPPLIER DEVELOPMENT
Business must create jobs as ESD promotes local manufacturing.
Businesses are encouraged to invest/support black owned SMMEs.
Contribution can be monetary, e.g. loans/investments/donations.
Contribution can be non-monetary, e.g. consulting services/advice/entrepreneurial programmes, etc.
Outsource services to suppliers that are BBBEE compliant.
Identify black owned suppliers that are able to supply goods and services.
Develop the business skills of small/black owned suppliers, e.g.sales techniques, legal advice, etc.
Support the cash flow of small suppliers by offering them preferential terms of payment.
Businesses should invest in/support black owned SMMEs.
SOCIAL RESPONSIBILITY/ SOCIO-ECONOMIC DEVELOPMENT
Businesses should CSI focus on critical areas which can affect growth and development in the country e.g. environmental awareness/education/ housing, poverty/unemployment etc.
They should distribute scarce CSI resources to selected beneficiaries in the community.