South Africa has elected to implement Black Economic Empowerment (BEE), a policy intended to correct historical racial and gender imbalances. BEE is also viewed as part of a strategy of growth. Policy makers have concluded that without it, it is unlikely the economy will grow at the high rates government has been talking of lately. The policy has attracted considerable attention from policy makers as well as the business community for a number of years.
This policy affects all businesses and those who manage them need to understand it. Because foreign investors are not exposed to the policy as it evolves, they have a specific need to familiarise themselves with the simplified argument set out below. In the debate on BEE, fears have been expressed on aspects of BEE. These have largely been found to be either less severe than initially thought or without any basis by those who studied it. BEE is an evolving policy and therefore changing as it unfolds.
The Codes are complex, and apart from adding to an already cluttered array of compliance requirements, it takes time to understand how they fit in with these.
A number of sector charters have been drawn, and typically they seek to redress the almost complete absence of black people as shareholders, executive managers, and non executive directors. Employment equity is a feature of all charters. aiming to change the typical racial make up of employees where white employees would dominate the higher echelons and black the bottom end. Charters also cover preferential procurement and skills development.
The Codes of Good Practice for Broad Based Black Economic Empowerment aim to centralise the process of BEE. The Codes seek to be a standard by which all transformation charters should measure themselves. It remains in draft form for comment. In the light of comment received, changes may be introduced.
As for the Foundation itself:
The BusinessMap Foundation is a South African based not-for-profit research organisation and think tank, focusing on the economic transformation of South Africa and the region. Our major focus is the change in the racial profile of the economy, from one designed to serve the interests of the white minority to one catering for all the country’s people.