Transformation is about more than just ownership
Transformation specialist Roxanne Da Mata says true transformation is in the transfer of knowledge.
Broad-Based Black Economic Empowerment (B-BBEE) will never amount to true transformation as long as the government does not push for the execution of a holistic transformation of South Africa’s socio-economy. The B-BBEE Act is about transforming the lives of designated groups by increasing the number of black people that own, manage, control and gain employment in South Africa’s economy. However, B-BBEE has been allowed to become a tick box exercise with weak and inadequate mechanisms used to enforce and monitor organisational transformation.
The Codes of Good Practice aligned to the Act set out five areas of measurement: ownership, management control, skills development, enterprise and supplier development, and socioeconomic development. The often-narrow focus of B-BBEE codes on creating ownership for designated groups has formed discrepancies in bringing about true transformation.
A report by the Broad-Based Black Economic Empowerment Commission (BBBEEC) stated that on average companies are not meeting 50 percent of the targets for management control, skills development, and enterprise and supplier development.
However, organisations can be transformed in other aspects apart from ownership. Companies can focus on enterprise and supplier development. Instead of just handing out young Small to Medium Micro-sized Enterprises (SMMEs) funding, these organisations can impart their knowledge of the business world, ensuring more black businesses grow their skills and knowledge making them profitable and sustainable.
Figures assembled by the BBBEEC also show that between 2015 and 2017 the number of black business owners decreased from 33.5 percent to 27.8 percent.
Transformation falls within both the government and private sector ambit. Private companies have an onus to be transparent with verification agencies when applying for their B-BBEE scores. The South African National Accreditation System (SANAS) must ensure all verification agencies apply objective consistent methods that reflect the true BEE score of graded companies. The South African government has a duty to sternly apply its own B-BBBEE codes internally and to stop awarding tender contracts to entities that are not transformed.
According to the BBBEEC’s report, only eight state-owned entities out of 131 submitted a BEE compliance report for assessment last year. But, for transformation to truly be effective it must move beyond simply being about hiring the “right” people and being about whether the people hired are qualified for the job.
To achieve this, the government must invest heavily in education and in ensuring that pupils and students are equipped with more than just a basic knowledge of the working world.
We need to reform our education system. We need to equip learners at a basic education level with skills that will make them employable in a world operating during the fourth industrial revolution. We are not producing graduates that are capable of being organisational leaders, where often the onus of imparting these skills falls on employers. As a result, companies are not promoting people from designated groups into management roles in high numbers.
According to the BBBEEC, from 2007 to 2008 there were 18.8% black people in top management and in 2018 there were 14.3 percent In senior management, there was a slight increase from 18.1 percent to 22.1 percent of black managers.