Business Link

Changes to broad based black economic empowerment (BBBEE) requirements are making it easier for small to medium and family-owned companies to comply, according to Jonathan Goldberg, ceo of Global Business Solutions.

“It would seem that a number of changes are going to be gazetted in the Codes of Good Practice that are due in October/ November this year. We are sure that these Codes will be passed by cabinet and they will be implemented virtually immediately,” he says. Goldberg believes that the following changes to the Codes of Good Practice published in December 2005 are likely:

Investments in companies held for black beneficiaries, as well as ownership through pension and financial services may be excluded.
There are expected to be fewer management categories. There may be some lessening of the targets in middle and senior management in respect of the high targets that were set in the Codes of Good Practice subject to public comment.
Employment Equity may go up to 15 points as a result of lack of progress in respect of employment equity throughout the country.
Skills Development may be allocated 15 points split between payroll and learnerships.
Procurement will probably remain at 70% and Enterprise Development and Corporate Social Spend will be calculated on a nett profit after tax figure for both categories.

Qualifying Small Enterprises will have to qualify with only five of these and in all have an easier target to achieve under each category, he says. It will, for example, be possible for Qualifying Small Enterprise to leave out ownership and management and concentrate on the remaining elements. These companies may score higher points than those which
have focused on ownership.

However, Goldberg predicts that there is “going to be a huge rush in respect of implementation as everyone will now have to comply with the legislation if they want proper broad based black economic empowerment points.

Most enterprises sit in a position wherethey do not have proper recording systems in place and have not strategically structured their Broad Based Black Economic Empowerment strategy and spend in the right direction and will be shocked at the independent rating of their score.

Many South African organizations are going to be non-compliant or have very little compliance and therefore have a score of below 40 points,” he says.