B-BBEE Isn’t Working. Where to From Here?

Our last article (It’s Time to Stop Equating Ownership with Economic Empowerment) garnered considerable interest and the survey responses and comments received across the board confirmed the general sentiment that Black Economic Empowerment (BEE) isn’t working in the way it was intended to. Topping the list of criticisms were statements relating to “check box exercises”, compliance, cronyism, fronting, inflated pricing, corruption and unsuccessful skills development initiatives, but by far the bulk of the feedback suggested that collaboration and a collective effort was required from corporate South Africa, service providers and Government to achieve economic empowerment for all.

As it turns out, the balanced B-BBEE Scorecard is, paradoxically, rather UNBALANCED.

The scorecard has evolved substantially since its inception, while giving rise to many loopholes. It is also perceived by many as being purely a check box mechanism which enables abuse of power, cronyism and fronting. However, despite these shortcomings, it is in the implementation of initiatives within the current framework of B-BBEE that we can restore the balance.

Big corporates in South Africa have an opportunity to utilise the flawed system of the current B-BBEE codes to make a difference if they incorporate it into their corporate strategies. Beth CookCEO of Progression explains, “Think about it this way: BEE gives most SA corporates quite a substantial budget to work with to implement change within their organisation while impacting on the lives of unemployed and unskilled South Africans. This budget can and should be used effectively across the various elements instead of being wasted on quick fix, last minute meaningless initiatives just to achieve points and compliance.”

“Surely every CEO and CFO should be horrified by the waste of millions of Rands with no real measure of ROI other than compliance?”

Joanne WilsonBusiness Development Consultant at Progression, with 23 years of experience in the industry under her belt, goes on to confirm, “I see it with Service Providers in the BEE space time and time again. Clients come to them at the dying hour of their financial year-end with a budget and a large number of unemployed learners they need recruited ASAP, or an amount that needs to be ‘thrown’ at an Enterprise Development or Socio-Economic Development project. What a waste of time, effort, money and opportunity!”

Adopting a top-down approach is key, which means initiatives are driven from the CEO down, and not just a KPI measurement for line managers to achieve. Companies should take a strategic approach to B-BBEE where compliance is only one pillar of that strategy. It’s a great start to change the narrative and the boardroom dialogue about B-BBEE. Try it and you will see a different outcome. Start talking about B-BBEE in terms of positive change and not a grudge-spend, a waste of money or how to “milk the system” – change your attitude and mindset towards BEE to one that talks to your strategy, culture and values.

A strategic B-BBEE solution should include almost all the elements of the scorecard and in most instances, what happens in one element should have an impact on another – from developing a culture of mentorship and continuous growth, to growing external resources for your own and other opportunities from a grass roots level upwards. These are solutions that are possible within the current framework of the scorecard through collaboration, a collective effort and strategically thought-out initiatives.

In order to move forward, we must go back to the original spirit of the B-BBEE Scorecard which demands inclusion, genuine participation and real empowerment.

It is possible to implement initiatives that are ethically crafted while at the same time also supporting compliance targets. The goal should be strategic solutions that talk to both the intention of the scorecard as well as economic transformation for organisations and all South Africans.

The systems and mechanisms for transformation are in place but at the end of the day, the outcomes achieved depend on how these are utilised and implemented. What it comes down to is the level of understanding on the part of our business leaders of the challenges facing the country, as well as their moral desire to actually make a difference and to live up to those noble Vision and Mission Statements that are grandly displayed in their corporate entrances and on their websites.

For more information on how true transformation is possible within the current framework, please contact bethcook@progression.co.za or Joanne@progression.co.za

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