In a world often driven by data and figures, it is easy to become fixated on numbers as indicators of progress. However, as the annual Sanlam Transformation Gauge report for 2023 reveals, a more nuanced narrative lies beneath the surface when it comes to the Black Economic Empowerment (BEE) scorecards of companies.
Commissioned by Sanlam and compiled by BEE rating and research agency Empowerdex, this report has entered its third year of publication with a mission to delve into the heart of transformation within South African businesses.
Delving into the intricate fabric of 14,542 BEE scorecards, encompassing both listed and unlisted companies, Empowerdex's analysis was complemented by insights gleaned from individuals working within these organizations. The conclusion drawn was unequivocal: the facade of transformation portrayed by scorecards does not always align with the reality on the ground.
Worthy of note is that the report opted to exclude BEE points awarded through participation in the Youth Employment Service (YES) program. This decision was in response to concerns raised by verification agencies, who questioned the depth of skills development reflected in BEE scoring, labelling it a cursory exercise of limited substance. The agencies also voiced apprehensions that some businesses were merely investing financially to secure points, rather than fostering genuine transformation.
Among the significant revelations is the revelation that many enterprise and supplier development initiatives are undertaken primarily as a form of compliance. This poses a significant question about the essence of transformation in these contexts. Furthermore, the report spotlighted concerns around ownership, highlighting potential pitfalls such as misstatements and fronting, leading to calls for a thorough review of this aspect – some even advocated for its exclusion from future scorecards.
Amidst the challenges, one ray of consistency emerged – the socioeconomic development sector, where corporate entities consistently exceed predefined targets.
Elias Masilela, Sanlam's board chairperson, delivered a thought-provoking insight during the report's presentation. He emphasized the importance of moving beyond surface-level numbers. While incremental improvements in empowerment ratings might paint an optimistic picture, a deeper dive exposes the reliance on socioeconomic development scores to uplift the overall rating, masking the actual progress.
The report's findings also beckon South Africans to ponder the state of transformation, two decades after the inception of the Broad-based Black Economic Empowerment (BBBEE) policy. Masilela shifted the focus from blaming the BBBEE policy itself to deeper-rooted issues like corruption, racism, and the underlying attitudes of decision-makers as hindrances to genuine transformation.
Highlighting specific sectors, the report points out areas of regression. Industries like agri-BEE, construction, integrated transportation, property, and tourism have witnessed a decline in Black ownership. On the front of Black management control, sectors such as property, forestry, marketing, advertising, communication, and even mining and quarrying showed signs of stagnation or decline in progress.
The financial and manufacturing sectors, disappointingly, showed no improvement in management control scores over three years.
In conclusion, the report serves as a clarion call to delve deeper into the transformation story. It encourages stakeholders to lift the veil on the challenges and opportunities that exist beyond mere numbers, advocating for a comprehensive and honest evaluation of progress. As South Africa continues its journey towards a more equitable future, the Sanlam Transformation Gauge report reminds us that genuine transformation encompasses more than just numerical milestones – it is about reshaping the very fabric of society, one nuanced narrative at a time.