BEE – THE BUSINESS IMPERATIVE

1. BEE – THE BUSINESS IMPERATIVE

2. What is Empowerment? “an integrated and coherent socio-economic process that directly contributes to the economic transformation of South Africa and brings about significant increases in the number of black people that manage, own and control the country’s economy, as well as significant decreases in income inequalities.”

3. What is empowerment? • Political transformation • Economic transformation? • Are we there yet? Consolidation? • Is there a low road?

4. What does government want? Aim and Objectives of BEE Act: • To create a national framework for promoting black economic empowerment • Changing racial composition of ownership and management and skilled occupations of existing and new enterprises • Increase employment

5. What does government want? • Increase black women ownership and management • Empowering rural, and local communities, and worker ownership, • Promoting access to finance for black economic empowerment • …what does business want?

6. 30% Shareholding Owners / management Control Employment equity 30% Skills Development Employees Learnerships 30% Preferential Procurement The supply chain Enterprise Development Social Investment 10% Unemployed / unemployable in the environment of business The dimensions of BEE 100%

7. Total classification Superior contributor

8. How is business approaching BEE?

9. How is business approaching BEE • Hiding, ignoring, exploiting, complying, or embracing • Compliance Function? [summons received!] • Does the scorecard grow businesses? • High road or Low road…mindsets

10. Dominant Management Logic Mindsets on the low-road Cost Transformation Performance

11. Mindset of the low road • White giving to black • Fear and wanting to see BEE fail • Pack for Perth

12. Adjusting the BEE Mindset BEE test BEE: What is it, For me & the business BEE team Dominant management logic Adjusting the mindset 30 day review Info plus interpretation leads to knowledge, Knowledge coupled with appropriate action leads to wisdom

13. Adjusting the BEE mindset • New markets, new clients • New society • Who is going to have spending money in 5 years time? • Who is deciding on procurement? • Who will be your future client?

14. Opportunities Financial Services Charter: • Each financial institution - minimum target of • 20% to 25% black people at senior management (> R450 000pa) level by 2008; • 30% black people at middle management level (> R250 000pa) by 2008; • 40% to 50% black people at junior management level (> R150 000pa) by 2008;

15. Opportunities • Who is going to be offering their services to those with spending money? • Do you understand your client?

16. Move from Risk to Opportunity • It’s all about people!! • The challenge is choice: Ignore, comply, or transform • The real challenge is the extent to which SA Business really wants to change

17. Move from Risk to Opportunity • Challenge your mindset • Compliance has no impact on transformation [does the scorecard transform?] • Rugby world cup 1999

18. SA Rugby -2003 In past: • BIG business - white “owned” for many years • Dominant culture – white male At face value: • Great “scorecard” BUT…

19. SA Rugby BUT… • Transformation…? • Empowerment…? • Attitudes…? • Perceptions…?

20. Transformation and growth • Transformation and growth • South Africa must both grow AND transform. • Growth OR transformation is untenable.