BEE Compliance for Listed Companies and State-Owned Enterprises
The question, to BEE or not to BEE, made popular by South African comedian Leon Schuster, should not find its way into the boardrooms of listed companies or State-Owned Enterprises. Unfortunately, as statistics would show that the joke has, in fact, made its way, with only 30% of listed companies achieving a BEE status of level 4 and above in 2018. This compared to 40% in 2017 and 60% in 2016. The steady decline of listed company compliance must be addressed and corrected if we are to ensure the success of B-BBEE policy.
The levels of BEE compliance for listed companies & SOE’S are directly linked to the growth and socio-economic upliftment in our country. According to public opinion, the biggest downfalls attributed to non-compliance is that the legislation that governs BEE implementation isn’t clear or explained well. In this post, we discuss the history of BEE compliance for the mentioned entities, explain the link between compliance and growth as well as provide you with an opportunity to attend one of our seminars on BEE submission requirements, in JHB or DBN.
Prior to April 2018, the only BEE requirement listed companies & SOE’s had to do was complete a form, attach their current B-BBEE certificate and submit to the B-BBEE Commission. Since then, these entities are required to do the above-mentioned in conjunction with completing an additional form. This additional form contains a “reporting matrix”, which separately lists each element, discussed in our BEE seminar on Submission Requirements, of a Listed Companies & SOE’s scorecard.
According to legislation, a listed company MUST publicly disclose their BEE status. Despite the legislation for disclosure, research shows that 23% of listed companies have no BEE disclosure or possess a status of non-compliance.
The reliance of BEE compliance is shouldered heavily by ownership; which is only one part of the “compliance reporting matrix”. Given that ownership is an integral factor in compliance, the over reliance on this aspect deters from the other aspects of compliance – like enterprise and supplier development, skills development, socio-economic development and the Youth Employment Service (Y.E.S.) initiative. (all services provided by ETC)
ET Consult is here to help.
There is an increasing need for listed entities to put their weight behind driving transformation and the avenue to accomplish this is sustainable BEE strategies. BEE compliance for listed companies creates a connection between markets and social change that many listed companies are yet to discover.
Failure to engage in inclusive growth and the lack of transformation in society will lead to muted growth for South African markets; as disclosure of BEE status helps investors understand an entities transformation efforts. Listed entities should take advantage of the economic incentive BEE compliance brings; by addressing inequality, becoming compliant and implementing sustainable BEE strategies.
Simple compliance is not enough and is a business strategy that is outdated as competitors move toward sustainability.
Listed companies and SOE’s are required to make their compliance report available on their websites. Failure to provide a report will result in penalties, at the discretion of the B-BBEE Commissioner and will be considered deliberate non-compliance.
In addition, the submission requirements are applicable to all listed companies, irrespective of primary or secondary listing.
We are running a BEE Pro Course that will kick start your transformation journey. For listed companies attending the BEE Pro training course, we advise you to attend our seminar on BEE Requirements andSubmissions for listed companies & SOE’s.
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