“BEE should be implemented from the grassroots level, not from the top downwards”

Original publish date – Fri, 08 May 2009 08:21:20 +0000, Keith

I’m seeing many comments about BEE lately – not entirely negative, but more positive criticism like “BEE should be implemented from the grassroots level, not from the top downwards.”

I have always stated that it’s a pity that the BEE codes did not start with the elements in the reverse order, ie SED, then ED, the procurement, skills etc.
That notwithstanding, BEE still does have 7 elements, on which enterprises earn various points for achieving certain targets, even pro-rata points can be earned.
The point I wish to make is that sometimes enterprises themselves are to blame, not necessarily government for the poor implementation of BEE. The policy is excellent (I’ll be happy to debate this issue anytime), but the way that companies have gone about it is bad, and does not even make business sense in many instances. I can never understand why a company will, for example, sell shares at a huge discount and in the process earn very few BEE points at high cost to them. They have so many other alternatives that do earn more points, costs less and will have far bigger beneficial impact on the country and their own company. For example, why not spend money on skills development for employees? It will increase productivity, allow room for personal development and help the company become a lot more compliant than simply selling shares to a big investor.

Many commentators complain that BEE enriches a small handful of businessmen. I do not deny that some businessmen (both black and white) have become wealthy as a result of the BEE policy of certain companies. I simply question those companies as to WHY they chose to implement such a policy. They could far easier, and more cheaply earned points on other areas.

What is even worse is that some of the share deals are under water due to the JSE dropping. This means that the entire shareholding deal of some companies is going to cost them more money, and will earn them absolutely no points. This is due to enterprises/companies making wrong decisions about how to implement the BEE policy, not because the policy itself is bad. So, to a large extent the criticism should be directed at companies and not government.


You may also like...