When addressing the topic of broad-based black economic empowerment (BBBEE), it is important that we find comfort in the preamble to our Constitution: “We, the people of South Africa, recognise the injustices of our past.”
BBBEE is an integrated and coherent socioeconomic process that seeks to ensure broader and meaningful participation in the economy by those who have suffered the injustices of our past (mostly black people) to achieve sustainable development and prosperity.
Much of the narrative around BBBEE centres on whether it is still relevant and whether it has failed to achieve its stated goals.
The short answer is that BBBEE is more relevant now than ever before.
At the same time, while we have to recognise that it is a good policy, designed to drive much-needed transformation effectively, there have been shortcomings on the side of implementation.
BBBEE has not progressed very well in terms of ownership and management.
This despite many companies claiming to have employment equity policies, which they supposedly strictly implement.
A report released last year revealed that black ownership on the JSE had declined by 5.75%, from 32.75% to 27%, while black female ownership declined by 1.9% to 0.9%.
General BBBEE levels of JSE-listed companies are also declining. In 2016 60% of measured entities achieved Level 4 and above BBBEE status.
That percentage declined to 40% in 2017.
To a large extent, this can be traced to the fact that public awareness of economic transformation has ebbed to its lowest levels since 1994.
The BBBEE agenda started dying under Thabo Mbeki’s administration, before practically disappearing during Jacob Zuma’s presidency.
Today the transformation agenda is all but lost, with many companies treating it as no more than a compliance matter. Yet the need for economic transformation is a moral and social issue.
Fortunately, under the leadership of President Cyril Ramaphosa, there is a real chance for the resurgence of BBBEE as a top priority for business and there is no better time to elevate awareness of the need for economic transformation.
The BEE revolution was started by Ramaphosa when he was asked to chair the Black Economic Empowerment Commission (BEECom) and was deputised by the then Black Management Forum (BMF) deputy president, the late Gavin Pieterse.
The BMF has always been at the core of various endeavours to transform society.
In 1997 at its national conference in Stellenbosch, a resolution was taken to establish the BEECom.
The BEECom was given a clear mandate, which led to the BBBEE legislation.
Subsequently, the ANC endorsed the BMF’s position and the mandate of the BEECom.
It can thus be said that much of the BBBEE groundwork was done by our president, so there is no better person to steer and raise the bar of economic transformation.
Institutions such as the state-owned Public Investment Corporation (PIC) must continue to play an active role in driving BBBEE for meaningful transformation to take place.
With up to R2.083 trillion under its management, the PIC was established to be a catalyst for transformation and has acted as an activist among JSE-listed companies, where it holds interests.
It certainly used its muscle to drive transformation and has helped to transform ownership of many listed entities.
However, it would be fair to say that, despite the PIC’s generally positive performance, there have been instances of a lack of oversight and governance.
This has resulted in some of the anomalies we have seen within the PIC, such as its questionable investments into Ayo Technology Solutions and VBS Mutual Bank.
The obvious solution to the PIC’s problems is improved governance – added controls, risk oversight and legal oversight that will provide a stronger line of defence within the institution.
This must be coupled with the right controls for employees to prevent dubious deals.
The PIC has a big role to play in raising awareness about BBBEE.
It is also the PIC’s role to help develop black entrepreneurs.
Entrepreneurs are the lifeblood of any country’s innovation, economic growth and creation of jobs.
But ultimately, public and private sector companies need to question whether they are playing an active role in transforming South Africa and need to support BBBEE with actions.
. Maweni is a former MD of the Black Management Forum and current chairperson of Valued Citizens Initiative