TOWARDS AN EFFECTIVE NATIONAL MEASUREMENT OF TRANSFORMATION BY COLIN ANTHONY
The results of the 2022 Sanlam Gauge are based on the B-BBEE scores of 10,336 companies, by far the largest survey of transformation in South Africa that covers all sectors. This provides a strong platform to build a national database that truly reflects the progress of transformation, which we believe is a pre-requisite for generating policies that serve to accelerate both transformation and economic growth. In the short term, the survey findings and the comments from industry participants highlight numerous problem areas that require immediate attention which the newly formed Presidential B-BBEE Advisory Council is well placed to address. With South Africa emerging from the devastating effects of the Covid pandemic, B-BBEE sector councils are working hard to get transformation initiatives that had been stalled by the lockdown restrictions back on track. Similarly, sector-wide economic rejuvenation strategies are being implemented across the economy and these are often being integrated with transformation objectives. There is some tension between the two with some perceiving that transformation comes at the expense of recovery. However, most sector councils are generally positive that the two are not mutually exclusive. The quest to combine transformation with economic growth is one that will be top of mind for the newly appointed Presidential Broad-Based Black Economic Empowerment (B-BBEE) Advisory Council, established in July by President Cyril Ramaphosa with councillors representing government, business, labour, the youth and other stakeholders. Its primary mandate is to address the issues raised by many of the people we interviewed: that transformation is happening too slowly, that it is not meaningful particularly at the management and ownership levels and that after 28 years of democracy it is time we reassess the B-BBEE framework and address areas that are not working. A strong belief persists that the overall B-BBEE strategy needs to be adapted, or possibly overhauled completely, so that it better reflects transformation on the ground.
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In any such assessment, it’s important to also look at the elements that are working. Socioeconomic development stands out: the 10,336 companies in our database exceeded the target by an average of 160%. With various bonus points allocated for certain sectors and qualifying small enterprises, as well as additional elements where certain subsectors can attain extra points, it’s possible to achieve more than the scorecard weighting. It’s easy to sniff at the high scores for socioeconomic development and accuse companies of throwing money at a problem so that they can tick it off on the scorecard, and indications are that too many companies do so. But most of the bigger companies, particularly those in the public eye, do put in a lot of effort to ensure their contributions make a meaningful impact on the beneficiaries. UPWEIGHT? The average scorecard weighting for socioeconomic development is small, however, averaging 6.4 points across sectors – followed by skills development (20) and management control (20.6). Akash Singh, co-founder of Sigma International, a specialist enterprise development and impact company, calls for this element to get an increased weighting. “It offers a great opportunity as a catalyst of and link to the community tourism agenda,” he states in our article on the tourism sector.
