Archive for April, 2010
Most people know that if their annual turnover is less than R5million then they are classed as an EME – exempt micro enterprise. They believe that they are exempt from BEE and do not need to take any action. They hope that their customer will recognize them as being exempt and that they will win the business they want.
This is unfortunately not true. An EME is generally, but not always a business with a turnover of less than R5million. Some industries, e.g construction have changed those thresholds.
More importantly it is not sufficient to tell your customer that you are exempt or expect them to guess!
You need to tell your customer why you are an EME, and you need to prove this, usually by means of an auditors letter/certificate.
Why use EconoBEE? We will help phrase the document/letter you need to send your customer. We help explain to your customer why you are exempt and how it will assist your customer in continuing to do business with you.
Most importantly, we will talk to your customer if he is not satisfied and give him all the documentation he needs to convince him that you have given him the right information. There has been the odd occasion that a company has rejected our EME pack. In all cases, we work on the side of our client to convince the customer to change his mind. In every single case we have won the legal issue, and satisfied the customer.
We know of businesses that have tried to explain their EME status to their customer, failed to convince them and lost the business. It won’t happen with us. We will satisfy and convince your customer!
Someone asked me if I really thought B-BBEE was a good, well thought out policy. I had just finished explaining to him about the scorecard and the various calculations needed and he was feeling a bit overwhelmed. He did not ask if I thought it has been implemented well, just if it was a good policy.
I reflected a bit and then explained:
How do you measure empowerment in a company? Do we just ask each company if they are empowered, and based on their very subjective answers decide if they are empowered? In the case of B-BBEE the architects of the policy realised than a subjective answer would not be fair, and difficult to evaluate. They decided on a scorecard. The higher the points earned, the more empowered the company would be. To give an analogy: Who is the better rugby team? In the last World cup, the British press thought it was England. South Africans thought it was South Africa. Would either side have been objective? When we played in the final, South Africa scored more points, in a game with specific rules, and adjudicated by the referee. At that point it was agreed that the Springboks were best. The Bulls have scored more points in the Super 14 final in the past two years and are therefore the best Super 14 team. In economic policy this was quite a step forward – to find a way to objectively measure companies via a scorecard.
The next point I had to make was that the scorecard fairly represented “empowerment”. If the scorecard was based on only ownership, it would not have encompassed all aspects of empowerment. The authors of the B-BBEE codes realized this and looked at all aspects of economic and social activity. By taking into account all seven elements, they took a further step forward. They decided upon indicators within elements which will give an even more accurate measure of empowerment.
The man I was speaking to initially felt intimidated by the amount of calculations. I pointed out that the architects and designers of the policy had managed to identify less than 40 indicators with associated targets, which is not a huge amount of data to gather and calculate. However this is sufficient to very accurately and objectively evaluate a company’s empowerment performance.
I am in awe of the design of B-BBEE as an economic policy that so effectively measures empowerment. I concluded my meeting by stating that the overall design of the B-BBEE codes, the indicators, weighting, and broad sprectrum of data gathered is worthy of a Nobel prize!