Original publish date – Tue, 27 Oct 2009 12:25:08 +0000, Keith
When a company receives a scorecard from a supplier, be sceptical about it! Look at it and analyse it to satisfy yourself that it is produced accurately. It is not the company’s job to double check all the data, but a certain amount of vigilance is required.
If you know that the scorecard given to you by your supplier is wrong then you stand a good chance of your own scorecard being invalidated. The last thing anyone wants in BEE is to be accused of fronting, i.e. misrepresenting their score, and this can happen if you are not vigilant.
We have seen far too many scorecards that are wrong, or at least need to be checked upon. It could be an innocent mistake, and in many cases we have seen it was an innocent mistake, or a mistake based on lack of knowledge.
In one instance the scorecard was produced this year, based on the draft codes of 2006. In another case of a generic company the employment equity score was 19 points (the maximum available is 15 plus 3 bonus).
In a third case, the company’s website states that they have been operating for 24 years, but the scorecard showed them as being registered in 2006. As a result they classified themselves as an EME (the codes allow startups to be an EME for the first year of operation). The codes also clearly states that “a startup enterprise does not include any newly constituted enterprise which (is) merely a continuation of a per-existing enterprise. However they “got” away with it. The following year the same company produced a scorecard as a generic showing zero points for ownership, 9.5 for management and 14 for employment equity. This is also unusual. We more often see a big black ownership score with zero management. In this case the white owners have taken on at least 50% black and black female directors, top managers, senior managers. Fronting? Not necessarily. Unusual? Certainly – definitely cause for concern and wanting to double check, in particular considering the strange situation of the previous year where the company re-registered themselves and continued operating as normal.