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benefits of bbbee business rating

By Penwell | Oct 26, 2009 | COMMENTS [ 0 ]

HAVING your business rated on the Broad Based Black Economic Empowerment scorecard creates more opportunities with both the government and private sector.

HAVING your business rated on the Broad Based Black Economic Empowerment scorecard creates more opportunities with both the government and private sector.

Today more companies are getting BBBEE rated in order to improve their chances of trade as more businesses require the BBBEE scorecard before doing business.

Sowetan spoke to Vusi Diniso, managing director of Express Verification Services, a member of Empowerdex Group.

Empowerdex was formed by two chartered accountants Vuyo Jack and Chia-Chau Wu to offer independent tools of measuring BEE initiatives and offer advice on black empowerment activity.

Diniso said the scorecard began in 2003 but back then there was no standard criterion or methodology to conduct scoring.

The government finally gazetted the Codes of Good practice which were launched on February 2007.

The entire scorecard is fundamentally based on the Black Empowerment Act No 53 of 2003.

Diniso said there are two types of scorecards.

Organs of state and private sector companies can be scored.

"Qualifying Small Enterprise (QSE) with an annual turnover of R5million can be rated by an agency which is accredited by the South African National Accreditation System.

"The second type is the generic scorecard designed for companies with an annual turnover of R35million," Diniso said.

Companies trading below an annual turnover of R5million are exempted from the scorecard.

"In the generic scorecard are seven elements against which the company is rated. Some elements weigh five, 10, 15 and 20.

"The QSE scorecard is less stringent because the government wanted to ease the regulatory burden on small enterprises, many of which are struggling under financial and capacity strains.

"It has seven elements which a company can be rated on. They can choose four of the seven, with each element weighing 25 points for a company to score 100," Diniso said.

Here are some of the seven elements of the scorecard.

l Ownership - which measures how much of the company is owned by blacks. The target is 25,1percent;

l Management - measures black representation in the board and top management level and the target is 50percent;

l Employment equity - measures black representation in different management levels with emphasis on female representation;

l Skills development - measures how much does a company spend in training of black employees.

l Preferential procurement - measures how much does the company procures from BBBEE rated supplies, black owned and black woman owned supplies:

l Enterprise development - measures the extent the company carries out initiatives intended to assist and accelerate development and sustenance of other enterprises;

l Social development - measures the extent to which the company carries out initiatives that contribute towards socio-economic development or a sector specific initiatives that enables black people access the economy.


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