Many people in business assume that becoming BEE compliant requires making dramatic changes to their organisation’s infrastructure. While this may sometimes be the case, a business often already possesses some of the important attributes of BEE compliance, which can simplify the BEE verification process.
The fundamental principle for measuring B-BBEE compliance is that a business possesses significant enough attributes in 7 key areas of the enterprise. However, smaller businesses may not be required to qualify in all 7 areas. Furthermore, those with an annual turnover of less than R5 million (a micro-enterprise) only require an exemption certificate.
Note: Some organisations still ask for full verification, even from exempted enterprises. It’s best to first check with your customers before you apply for an exemption certificate.
The seven elements that determine an organisation’s BEE score
- Ownership – measures participation in profits (or distributed profits) and voting rights.
- Management Control – measures participation in the control of an enterprise at board or board-equivalent level.
- Employment Equity – measures employment equity in workplace.
- Skills Development – covers initiatives that seek to develop black people’s competencies.
- Preferential Procurement – addresses the extent to which an enterprise favours other enterprises with respectable BEE compliance levels in product or service procurement.
- Enterprise Development – initiatives directed at facilitating the commercial development of other enterprises.
- Socio-Economic Development and sector-specific contributions – initiatives that promote black people’s access to the economy.
Each of these 7 elements is scored and then aggregated to formulate your BEE scorecard. This will determine your BEE rating. Because each enterprise is different, a number of factors determine what your overall score will be. This is why we offer an initial free assessment – so you can judge what, if any, work you need to do in prior to your B-BBEE verification; we then devise an approach to deliver the most favourable BEE rating.