How wrong can you be?

A sales manager visited us recently. We asked her to supply us with her company’s scorecard (important for our own Preferential Procurement). Her instant answer was: “We are not compliant, we will not be BEE complaint, my boss refuses to give his business away” - all in one breath.

On querying further she explained that her company is the most ethical and moral she has ever worked for and her bosses are socially very active - they donate money to an aids orphanage and have become involved in low cost housing, “but”, she repeated, “they will never give their business away”. “We employ lots of black people” she volunteered, "and spend a lot of money on training them".

I tried to explain that in this instance her company seemed to be very far down the line to achieving a good BEE score. Her company was most certainly more BEE compliant than they realised.

She still insisted that her bosses would still never give away their business. The more I tried to explain that BEE was not about giving away your business but rather "true empowerment", the more disagreeable she become, stating “that’s your opinion, I know better”. She explained that she reads the newspapers, and that is what BEE is all about. I explained that I read the BBBEE Act (act 53 of 2003) and the Codes of Good Practice (government gazette 29617), which gives the true achievable targets for Broad-Based Black Economic Empowerment.

In just a few minutes of talking to her, it appears her company could be fairly compliant, even if the owners choose not to sell shares in the business.

I do emphasise that the codes do not demand that owners give away their business - in fact ESKOM regards Fronting as receiving shares without payment - shares should only ever be sold at a market related price.

This company has obviously prepared their sales manager with a stock answer to the BEE issue, without even realising that they could easily have given me a response and a score - even a level 8 would have been satisfactory.

If only they would have made an effort to understand the codes and how to become compliant, they would have realised that they were already well on their way. Instead, a sales manager chose to argue with her customer - never a good approach to sealing a deal. She also exhibited such ignorance on an important business issue that I started doubting her knowledge on her own product. She lost business and she will continue to lose business when there is absolutely no reason to. What a waste!

Keith Levenstein

EconoBEE Presents in Cape Town Again

We will be presenting our famous half day BEE Scorecard Workshop in Cape Town on 24th May 2007. We cover all aspects of BEE. We go through the "7 Elements of True Empowerment", show you how you can prepare a scorecard for your customers and in a practical way give you ideas to help improve your BEE scorecard.

More details:
EconoBEE - BEE Scorecard Workshop 24 May 2007 at Belmont Square Conference Centre, Rondebosch, Cape Town.
Cost: R850.00
Booking: Contact This e-mail address is being protected from spambots, you need JavaScript enabled to view it or 0861 11 3094 and give us all your contact details to secure your place.

Demystifying the Adjusted recognition for Gender calculation

The draft codes of good practice made allowances for gender. In many aspects an enterprise could earn points under employment equity for black people, and additional points for black women. This always translated in extra indicators of some of the elements - one indicator for black people and another for black women.  Last year cabinet and the minister decided to reduce and simplify the number of indicators on the scorecard. The concept of gender adjustment was born.

Whereas previously the scorecard had two indicators - the new scorecards use the following wording in for example the QSE scorecard, employment equity.

Black employees of the measured entity as a percentage of all employees adjusted using the Adjusted Recognition for Gender (my italics)

How does this adjusted recognition for gender work, and is it less complicated than the old codes?

The codes use two formulae :