B-BBEE stands for Broad-Based Black Economic Empowerment, and it forms a part of the South African government’s strategy for economic transformation. The law regarding B-BBEE is vast, and in some instances, it has been tailored for certain sectors.
The aim of B-BBEE is to rectify racially based inequalities through the promotions of more black management, corporate control and ownership. The Broad-Based Black Economic Empowerment Act forms the basis of the law that should be observed regarding B-BBEE.
In terms of the act, the Minister of Trade was given the authority to issue Codes of Good Practice, which will help employers and the private sector in general to implement B-BBEE compliant strategies. In the Codes of Good Practices, sections are set out that make provision for the following:
- How to measure ownership
- Management control
- Skills development
- Socio-economic development
In wake of this legal transformation, companies can apply to a Verification Agency for a certificate stating that they are compliant with the law. Interestingly, the JSE now requires that all listed entities should disclose their compliance with the act on an annual basis as 1 April 2018. This is good news for transformation in South Africa, and will hopefully correct further imbalances.
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