OVERVIEW OF THE ELEMENTS OF B-BBEE

The B-BBEE Scorecard historically only measured the level of equity involvement i.e. economic interest of black people in companies, known as Narrow-based Black Economic Empowerment. From 2007 the Black Economic Empowerment initiative has moved to a broader measure, called the Broad-based Black Economic Empowerment Scorecard.

This B-BBEE Scorecard measures a level of compliance against 5 elements, each of which are in turn measured against targets with specific weightings, namely:

1.      Ownership

The level of involvement of black people in the ownership structure of a company;

2.      Management Controland Employment Equity

The level of representation of black people in all levels of a company, from Top Management (executive directors) to Senior, Middle and Junior Managers;

3.      Skills Development

The value of training expenditure specifically provided to black employees and black people, measured against a company’s annual payroll;

4.      Enterprise and Supplier Development

Measures how a company has exercised its buying power based on the B-BBEE Scorecards of their suppliers (called Preferential Procurement). This element also measures the level of contributions made by a company in supporting the development and economic stability of black-owned companies;

5.      Socio-economic Development

The value of contributions paid to beneficiaries who are black people, with the objective of enhancing those beneficiaries’ access to the economy.

Contributions range from support for education, sport and culture, art to charitable donations. These contributions are measured against a company’s net profit after tax.