The research also found that management scores were lowest across all sectors and all size categories, “with companies generally meeting targets at junior management level but falling short in higher levels”.
“One common refrain is that skilled black personnel are in high demand so it is difficult both to hire them and retain them. Prejudice is raised as another factor. Companies are also accused of not doing enough to train and develop junior staff.
“One proposal to address this is to recruit people who have a willingness to learn, develop and grow and then be groomed for promotion, rather than focus only on recruiting already qualified people.”
The Covid-19 pandemic, according to the report, has contributed to the lower levels of economic activity, making it more difficult for companies to meet scorecard requirements.
The report noted that the BBBEE commission was investigating 426 cases of fronting out of a total of 822 cases received between June 2016 and September 2020. It viewed this as another hindrance to transformation.
According to Andile Khumalo, CEO of specialist investment firm KhumaloCo and Sanlam Gauge co-founder, the ownership points on the scorecard actually mean that black people own less than 30% of the economy, while the country is aiming for 51% black ownership, which itself is not representative of the country’s demographics.
“Reasons cited for the slow pace of black ownership include lack of funding of ownership deals, lack of specialised skills to contribute meaningfully in an organisation’s operations, mismatch between company owners and black shareholders, corruption in the form of fronting, lack of strategic leadership, and a tick-box approach.”
For ownership to be meaningful, black owners needed to be directly involved in core operations, have voting rights and be part of decision-making bodies, the report suggested.