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Understanding BEE Requirements |
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SUMMARY OF BLURB To set the waffle aside & get to the quick of the matter, the Government's strategy FOR building a black middleclass is to direct your spending toward companies that are BEE compliant. If you do not, it will cost you money and if our organization is not BEE compliant, your customers will do less business with you, because buying from you will cost them a part of their compliance accreditation. In essence BEE companies are measured on various compliance issues including:
ADVANCED BLURB READING Requirements in terms of government's Broad-Based Black Economic Empowerment Strategy of 2003 are sometimes complex and many entrepreneurs are concerned that they do not have the necessary knowledge or means to implement the strategy effectively in their companies. This is according to Paul Malherbe, COO of Business Partners Mentors, which provides professional mentorship and consulting services for small and medium enterprises. "The provisions of the
strategy and the various other legislative instruments developed
by government to promote black economic empowerment (BEE) require
specific deliverables," he says. "It is important for
every entrepreneur not only to understand the criteria set out in
the strategy, but also to find the most effective and cost-efficient
way in which to meet them."
In general, the objectives
of the strategy are to:
"With these far-reaching objectives, it is vital that a business develop an implementation plan in order to ensure compliance with legislation," says Malherbe. "At Business Partners Mentors, we've focused for the past year on enriching our mentor and consultant base in order to meet this need." Business Partners Mentors is able to provide the specialist services of a vast number of professionals to assist entrepreneurs with BEE implementation and compliance. These range from sector specialists to HR professionals, financial experts and systems analysts. Compliance will be need to
be reported by way of a BEE scorecard, which has been developed
with the aim of measuring a consistent approach across all businesses
and all sectors. The scorecard will measure not only direct empowerment
within an enterprise, but also indirect empowerment, particularly
in terms of job creation, skills transfer and economic growth. Indirect
empowerment will be measured through each company's level of procurement
from BEE manufacturers and service providers.
According to a registered Business Partners Mentor who specialises in BEE consulting, there are a number of key measures on the scorecard. Companies will be required to show commitment to BEE on all levels, including with regard to ownership. "The BEE strategy indicates that between 26% and 50% of the shares of any company should be held by individuals from historically-disadvantaged communities," he says. "Companies will also be required to show commitment to using BEE suppliers and to providing measurable mechanisms for training and skills transfer." He warns against entering into the process of BEE implementation blindly and to be aware of unscrupulous business people and consultants when undertaking the process. In order for the process not only to be compliant, but to run smoothly and to measure up to the criteria of the scorecard, it's important to clearly identify the areas of the business that require attention. It is equally important to then seek professional assistance in drawing up a suitable BEE plan for the business and in monitoring implementation and compliance. Business Partners Mentors is able to offer assistance from a professional skills base on all levels and, in particular, can offer invaluable assistance in finding suitable BEE partners, in conducting formal due diligence and finalising the terms of agreement between the two parties. "Knowledge and understanding of the process and of the legislative requirements is essential," concludes Paul Malherbe. "And we feel we have enormous value to offer small and medium enterprises in this area." |
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The above information source from: http://www.sanlam.co.za |
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