BEE Partner, South Africa Economy Watch

Developing Black intellectual capacity

Developing Black intellectual capacity may appear to be irrelevant to QSE business. It is not as if most professional services firms such as accountants, attorneys, engineers and doctors fall into the QSE category. These professional services are at the heart of developing the country’s intellectual capacity. This section is critical to these professions.

There is little confidence in Black people by both Black and white people. It is that simple. The previous education system did not provide Black people with an equivalent education to white people. When a Black person enters the market an assumption is made that he or she does not have the same “mental prowess” as a white person. The result is an inherent lack of confidence in Black people.

Who have the least confidence in Black people? Strangely enough, Black people do. One seldom hears of Black people consulting Black attorneys on mergers and acquisitions. They go to white attorneys because they do not have confidence in their Black counterparts. Read the rest of this entry »

Learning programmes

The indicator specifies skills development spent on learning programmes. What constitutes a learning programme? If the money is not spent on a learning programme as defined, the measured entity may not include the expense in measuring skills development contributions. Statement 401 defines a learning programme as, “any of the learning programme types described in the Learning Programme Matrix“.

The Learning Programme Matrix is provided as Annexure 400A of Statement 400. It provides a broad spectrum of training that it considers a learning programme. Any of the following may be included as measurable for QSE contributions to skills development: Read the rest of this entry »

Having established how much the business needs to spend, the next step is to consider what to spend the money on so it will count as contributions to transformation. This section provides guidance on what the company may and may not include as skills development spend. The term “skills development spend” is defined, meaning that unless the spend meets the definition, it will not be included in the measurement. Read the rest of this entry »

Qualifying socio-economic development contributions

Socio-economic development contributions consist of monetary or non-monetary contributions actually initiated and implemented in favour of beneficiaries by a measured entity with the specific objective of facilitating sustainable access to the economy for those beneficiaries.

The contributions may be monetary based or non-monetary, such as providing training or sacrificing their employees‘ time in favour of beneficiary groups, as opposed to incurring a direct expense. The contribution must be “actually initiated and implemented“, meaning it must be exercised and paid for. Future initiatives do not count. Read the rest of this entry »

Targets

As mentioned above, the target is calculated on the same basis as that of enterprise development. The calculation is not clearly articulated in the Codes and is a technical computation. To avoid repetition, the following constitutes a brief summary of what was communicated under enterprise development.

The target for socio-economic development is 1% of net profit after tax (NPAT). NPAT is easily manipulated through accounting entries, so the Codes use an anti-circumvention approach, outlined below. Read the rest of this entry »

BEE Qualifying Contributions

Sector-specific contributions

The benefit-factor matrix refers to sector-specific contributions, which are not addressed elsewhere in Statements 700 or 807. There is a definition referring to sector-specific programmes. Although it is not clear whether there is a link between the definition and the reference to sector-specific contributions above, it would appear logical to assume so.

The origin of sector-specific contributions is from previous draft statements. The objective is that sector codes will determine sector- specific socio-economic development contributions as guidance to industry from each sector. Read the rest of this entry »

A crucial error in socio-economic development is not asking the communities what they need. One-sided decisions on contributions to beneficiaries are often counterproductive because the people may, for example, want a bridge over the stream to get to town more easily, whereas the company instead builds a school that the community cannot service with teachers. Read the rest of this entry »

The strength of a country and/or a business organisation, and therefore the strength of its strategy, is created by its human capital. At the heart of strategic thinking lies the purpose of preserving the environment: at the macro-level, preservation of the economy, whilst, at the micro-level, preservation of the industry participants. Few firms think about this. Individual agendas focus on maximising profits and, in neo-liberal market economics, maximising shareholder value at the expense of social values. Yet contributing towards industry and economic preservation benefits a nation in the long term and gives it economic strength, as well as the wherewithal for competing on the global stage. Read the rest of this entry »