B-BBEE Consulting and its role in Transformation and Empowerment
B-BBEE consulting is becoming a profession sometimes practiced on its own or as an item in a broader consulting service. Either way since the B-BBEE legislation amendment of 2013 became more technically complex it required some level of expertise which was initially not present within most businesses.
Are B-BBEE Consultants Empowered to carry out their Transformation Responsibility?
Business has invested in B-BBEE expertise internally especially in very large corporates. However, many businesses still utilise the services of external consultants to advise them on the legislative compliance.
While B-BBEE verification is regulated and controlled B-BBEE consulting is not. This is a current weakness in the evolution of the B-BBEE consulting profession. The prevailing widespread corporate practice demands technical compliance advice from B-BBEE consultants but control the agenda to suit its own cultural and business agenda.
This manner of consulting does not suit empowerment and transformation forcing the deepening of the provisions of the legislation which is a desperate act that further polarises our nation and entrenches our historic divisions.
B-BBEE Consulting: A Vanguard Against Unsavoury or Illegal Practices
B-BBEE compliance is voluntary but for many businesses it is a non-negotiable requirement for doing business with other companies or government and sometimes it brings out the worst practices where compliance through any means is undertaken.
The B-BBEE “Management Control” element now requires the management levels of a business to reflect the population demographic i.e. African, Indian and Coloured demographically aligned ratios are part of the scorecard requirement. Many companies struggle with this requirement and fall back on tired worn out excuses relating to skills and experience or alternatively devise illegal or unsavoury plans to become compliant.
Sometimes a company may place a willing but vulnerable black person in a management post without the commensurate remuneration or authority for that post and compounds this injustice by creating a fictitious paper trail to meet B-BBEE verification scrutiny. This is obviously against the letter and spirit of the legislation and is punishable.
However, some companies use B-BBEE as a reason to restructure their business and organisational design to avoid making the necessary black appointments into management positions but nevertheless demonstrate B-BBEE verification compliance.
This is a perfectly legitimate practice but is this not undermining the spirit of transformation and empowerment? I do not believe that companies must create superfluous management posts with black incumbents, to meet B-BBEE management compliance but when natural attrition processes occur, creating vacancies, this presents great opportunities to make merit worthy appointments of black people through fair, transparent and just processes.
The B-BBEE consulting profession needs a collective base and charter from which its members find their voice through standardised practises. This voice unifies and galvanises the practitioners to stand firm when corporate practice may choose to defy them and undermine their legitimacy by pitting one against the other.
Standardisation also allows for the development of a common agenda through which the spirit of the legislation being empowerment and transformation is held as its highest goal, and technical compliance advice services this single goal.
In the “Management Control” element of the B-BBEE scorecard many companies perform poorly with little or no improvement in successive years despite having a natural turnover of management staff. A B-BBEE consultant witnessing this long-term trend must be emboldened and supported by their professional body to question the recruitment practices and advise human resources on a long-term plan to rectify this trend.
Certification to Practice as a B-BBEE Practitioner
Members of the self-regulating B-BBEE professional consulting body must be required to be trained and certified on both technical and aesthetic value of the legislation and their membership must be dependent on them upholding this training and certification failing which should result in their exclusion.
Business must be required to have a certified consultant as its advisor be it internal or external. This B-BBEE consultant must be directly involved in drafting B-BBEE transformation policy within business. The B-BBEE consultant must have a voice at the highest level of decision making in benefactor businesses. The B-BBEE consulting body can also make recommendations around consulting pricing for the varying services.
B-BBEE Professional Consultants Body and their Partners
Technical advice on B-BBEE cannot be the summum bonum of B-BBEE consultants’ role and responsibility. The B-BBEE consultant role is to also ensure the advice they are providing has the best chance of a transformation and empowerment outcome.
The B-BBEE consultant is like a conductor in an orchestra with multiple contributions toward a harmonious symphony.
The orchestra is composed of big benefactor business, NGO’s, Training providers, woman/youth/people with disability in business, workers, unemployed people, small beneficiary businesses, business consultants, B-BBEE verifiers and government.
The B-BBEE professional body can vet some members of the orchestra according to their accreditations, values and principles and create panels of delivery partners which they can confidently recommend to their corporate benefactor clients.
The vetting of these partners must be rigorous, transparent, and fair. The values of the partners must also be enhanced by relevant and innovative transformational products and services with verifiable outcomes.
A typical scenario is skills development which we intuitively know is a major catalyst for employability and economic development and if done right it holds the key to alleviating many of the socio-economic ills that plagues our society.
We know that many corporate benefactors use B-BBEE Skills Development to expand employability among the vulnerable groups, particularly youth, woman, and people with disability. Therefore if a corporate benefactor wants to contribute to employability of unemployed people through learnerships they could get a recommendation from their B-BBEE consultant for a vetted skills development partner from their professional body panel which is not only accredited to conduct learnership training but add real value to employability by offering a workplace experience that improves the learners employment chances at least threefold.
B-BBEE Project Tracking and Research
Many B-BBEE projects continue well after the corporate benefactor has undergone verification and awarded a B-BBEE status level. The empowerment and transformational value of the project may only be known closer to its conclusion which is often beyond the scope of narrow compliance.
The B-BBEE consultant and their professional body could take on the role of tracking projects and recording its outcomes and perhaps partnering with research institutions such as Universities to produce research based on these records.
This will make the professional body a powerful lobby and interest group in terms of influencing the direction of the B-BBEE legislation.
A scenario where a corporate benefactor wishes to undertake development of small black business through the Enterprise Development or Supplier Development mechanism of the scorecard must be careful to ensure their intervention has lasting positive impact.
The solution devised has to be thorough and comprehensive and over a duration of at least 24 months. The Enterprise Development solution must incorporate three success components of Capital support, Skills transfer, and long-term mentoring.
History informs us that fledgling business fail despite securing the precious capital support because of imprudent business decisions or inexperience. A great way to conduct Enterprise Development is through the partner recommendations from the B-BBEE consultant professional body. Partners could assist the corporate benefactor to ensure all three success components are in place and the B-BBEE consultant can track the progress for at least 12 to 18 months to assess its impact.
Promotion and advocacy need to be undertaken in the form of open communication with the public and specific interest groups to make B-BBEE legislative content more accessible and understandable.
Promotion and advocacy need to be undertaken in the form of open communication with the public and specific interest groups to make B-BBEE legislative content more accessible and understandable. B-BBEE verification is an important measure of compliance to the letter of the law but it leaves gaps in terms of recording the true value of the spirit of transformation fostered by the legislation.
B-BBEE consultants can close those gaps in their project tracking and they could celebrate, promote, and showcase those projects and corporates that best exemplify the transformation and empowerment ideals and perhaps highlight the shortcoming as well. Corporates can sponsor this advocacy and promotion.
The Future of B-BBEE
In any democracy legislation that is race biased is not ideal, but our history requires a balancing mechanism which should have occurred naturally but unfortunately it required change through legislation.
B-BBEE in its present form is untenable if it continues without a sunset in sight. The sunset is dependent on the rate of transformation and empowerment of black people. Provisions of the legislation could slowly become irrelevant in a more just and equitable society or conversely it can become more pervasive in a desperate attempt to legislatively reinforce change.
Even if B-BBEE legislation is no longer required in the present form the role of B-BBEE consultants could morph into a more general empowerment of vulnerable groups as society will always needs its champions.
It is therefore in all our interest to ensure that the spirit of the B-BBEE legislation is as important as its words when we undertake implementation and for this we need the B-BBEE consultant profession to take on a more central role.
Authored by Sivarajan Naidoo
Sivarajan is Managing Director of Edupower Skills development academy, a level 2 BEE contributor. Edupower’s aim is to address the socio-economic issues of young South Africans by providing fully hosted learnerships and innovative solutions to absorption, enterprise & supplier development. Edupower is trusted by companies such as Unilever and Safair to address their corporate legacy in South Africa.