The answer to this questions is a YES and NO, depending on our outlook. The answer is YES if we are looking for any kind of short-cut or loophole in attaining our B-BBEE credentials. The answer is NO if we are committed to following the rules and implementing initiatives that will meet the objectives of the legislation.
A negative approach to empowerment holds some serious risks. If there is no commitment to really transforming the business, the company is likely to implement measures that will not meet the objectives of the legislation and could even fall foul of it.
The reality is that a company’s true intentions will over time become clear to all parties involved. A good question to ask is: How will the initiative be perceived a year or two from now? The penalties for various forms of “fronting practices” are severe. B-BBEE is currently subject to high levels of scrutiny by both government departments, state-owned entities and the B-BBEE Commissioner.
The opposite is also true. If there is a genuine willingness to share the company’s profits (in line with the company’s performance, of course) with those previously disadvantaged, this will be evident in the way our initiatives are structured and implemented.
I am convinced that good intent and transparency are two key ingredients to the sustainable empowerment of any business.
So why do many seem to be so fearful of B-BBEE that they are unable to move forward with their empowerment initiatives? Could it be that through the media they are hearing fear-inspiring messages? Could it be that even companies that want to do B-BBEE right are so scared of getting it wrong that doing nothing seems to be the safest course of action? I can’t help to think what such a situation will do to our economy.
I am of the view that there is nothing wrong with the legislation itself which makes proper provision for various forms of empowerment, including black ownership. The codes are clear on what the rights of black beneficiaries should be. It is also clear on the criteria that Broad-Based Ownership Schemes (most often hosted in trusts) need to comply with for such schemes to qualify as genuine black equity partners. The B-BBEE legislation is further supported by principles embedded in other legislation such as the Companies Act, Income Tax Act and Trust Property Control Act.
So, do we really need to fear B-BBEE? It would be a sad day if we did.