BEE & B-BBEE Explained

What is the difference between Black Economic Empowerment(BEE) and Broad-Based Black Economic Empowerment (BBBEE) ? 

The difference in these policies is while BEE sought to right the wrongs of the past, BBBEE aims at distributing the wealth of the nation across all races and genders.

Generic

  • Turnover greater than R50m
  • Generic Scorecard or approved sector charter applies
  • 5 Elements and 3 Priority Elements

Qualifying Small Enterprise (QSE)

  • Turnover between R10m and R50m
  • 5 Elements with Ownership as priority and 1 selected priority element

Exempted Micro Enterprise (EME)

  • Turnover less than R10m
  • Exempt from BEE and are recognized as level 4 contributors.
  • 100% Black Owned level 1
  • 51% Black Owned level 2

The Problem

BEE Implementation requires input from different people with different skills in order to be successful.

Managing incoming data, ensuring it is correct and then having it verified correctly can be the difference between a good score and just missing the level you require.

The Solution

The B-BBEE implementation process can be simplified dramatically.

A good score is a result of implementing transactions within a company and then identifying those transactions as earning BEE points. This simplistic approach only needs staff capacity to gather appropriate data and then analyse it.

Our approach to B-BBEE

Building on the simplified solution, we need to identify sources where data is going to be generated and build a management structure around those sources.

  • Phase 1

    Executive commitment. Assist the directors in understanding B-BBEE. Discuss targets/level required, as well as the resultant cost to implement the transactions to reach that level.

    Although the directors are not going to specifically implement any BEE activity they will decide on the direction the company needs to take with respect to implementing BEE activities. It is maybe fairer to suggest that the Executives decide on a direction with respect to an element with a consequence of earning BEE points.

  • Phase 2

    1. Assign a key person to be responsible for the final BEE scorecard and the collation of data.
    2. Create a BEE committee where key stakeholders related to each of the 5 elements are all members.
    3. Each stakeholder is responsible for the implementation of their respective element.

  • Phase 3

    Implementation. Stakeholders for elements need to begin implementing activities based on the Executives requirements.

    For example, if the Executives decide to invest more in Skills Development, then the element head will devise a skills strategy that best fits in with the objectives of the company. We will work with that person to best take advantage of the BEE points available.

    A monitoring mechanism should be in place. The reporting system is covered in phase 4.

  • Phase 4

    Identifying and interpreting transactions. Data capture structures should be implemented. In many businesses, data is generated and captured for purposes other than BEE. We work closely with the element heads to identify all types of transaction sources and then capture the transactions in a way that is BEE friendly.

    Once the data is captured it needs to be checked and the BEE points calculated. The preliminary scorecard is generated anytime from once a week to once a quarter depending on the time of the year in relation to the rating end period or financial year end.

    In many cases the element head should not be directly seen to be implementing BEE – rather their own element which is what they are already employed for.

  • Summary

    A successful BEE implementation is a result of finding the perfect synergies between the generation of BEE pointable transactions and reporting on them.

    Once that is found it creates a long term sustainable B-BBEE implementation management structure that will seamlessly work with new employees, legislative changes and growth plans of the business. The key is to measure this regularly, giving yourself enough time to implement any required activity before your rating period comes to an end.

B-BBEE Resources