Term
| Why was the BBBEE implemented |
|
Definition
- To reach a point where all South African companies are transformed to improving black people's access to the economy
|
|
|
Term
|
Definition
- Promoting economic transformation
- Decrease income inequalities
- Uplift the standard of living of black people
- Increase participation of black women
|
|
|
Term
|
Definition
- Encourages businesses to address the demands for equity directly
- A good BEE rating improves the image of the business
- Compliance=government tenders
|
|
|
Term
| Disadvantages of the BBBEE |
|
Definition
- Processes may lead to corruption or nepotism if not monitored properly
- Provides for preferential procurement, certain businesses may be excluded from supplying goods/services
- Businesses could experience large financial implications if they do not comply with BBBEE
|
|
|
Term
| Penalties for non-compliance |
|
Definition
- Imprisonment
- Fine (10% of company's annual turnover)
- Licenses may not be renewed
|
|
|
Term
| Compliance with the BBBEE |
|
Definition
- Appoint black people in managerial positions
- Sell shares to black employees/people
- Implement affirmative action when making appointments
- Outsource their services to BEE compliant suppliers
|
|
|
Term
| What is affirmative action |
|
Definition
| Preference to previously disadvantaged people - equal opportunities to all people |
|
|
Term
|
Definition
| Economic empowerment of black people. The participation of black people in the economy. |
|
|
Term
| What are the 5 BBBEE pillars? |
|
Definition
- Management control
- Skills development
- Ownership
- Enterprise and supplier development
- Social responsibility/Socio-economic development
|
|
|
Term
Management control
(Pillar 1) |
|
Definition
- Apply: Appoint black people in senior executive positions
- Advantage: Management must ensure black female representation in management
- Disadvantage: Shortage of skilled black managers, find it difficult to make appointments
|
|
|
Term
Skills Development
(Pillar 2) |
|
Definition
- Apply: Engage black employees in skills development initiatives
- Advantage: Provide learnerships and learning programmes to black employees
- Disadvantage: Productivity is compromised
|
|
|
Term
|
Definition
- Apply: Include black people in shareholding/partnerships
- Advantages: More opportunities are created
- Disadvantages: Many black people cannot afford shares
|
|
|
Term
Enterprise and supplier development
(Pillar 4) |
|
Definition
- Apply: Invest in small black owned businesses
- Advantage: Support suppliers with diversity in their ownership
- Disadvantage: Businesses become too reliant on support from other businesses
|
|
|
Term
Social responsibility/Socio-economic development
(Pillar 5) |
|
Definition
- Apply: Focus on critical ideas which can affect growth & development in SA
- Advantage: Improves image
- Disadvantage: Costly + Time consuming
|
|
|
