ON A TRIP around the country interacting with people from all spheres of life I made certain observations. I travelled through the Eastern Cape, KwaZuluNatal and Limpopo so I could understand the views of people on black economic empowerment (BEE). Most small businesses and people in the corporate world have felt the pressure of BEE falling through the procurement element, which enables them to have a basic understanding of BEE. The reality is that, whether you supply the government directly or not, you will feel the pressure of having to contribute to broadbased BEE because of companies within your value chain that have the government as the supplier. However, when you see the depth of understanding of BEE in the townships and the rural areas there is often either a low
level or no understanding. BEE manifests in the names that are given to commodities such as the big phones that people use, called the BEE phones, or the BEE shoes, the BEE car and the BEE style of dress consisting of a nice dark jacket with jeans. Beyond this people have no tangible interaction with BEE. Some people may have heard of the concept through the news. This is why people associate BEE with the likes of Patrice Motsepe, Tokyo Sexwale, Cyril Ramaphosa etc. When you ask them what their understanding of BEE is, you get blank stares. There is a need for basic education about BEE for people at grassroots level. This is necessary before any changes can even be contemplated. The reasonable question to ask is: how can you scrap something if you have not ensured it is tried and tested on all the intended beneficiaries? In the corporate world there is a basic understanding of what BEE is about but it is not deep enough for people to engage meaningfully in the debates and the subsequent implementation of the BEE policies. What is clear is that people have their own opinion of BEE influenced by what others, such as friends and family, have said about the policy and by what the media say. So such perceptions may be true and sometimes they may not bear reality to the actual policy.
Furthermore, the way people implement policy within the company has an impact on the outlook about BEE. For example, if my performance bonus is determined by
how the company scores overall on BEE then the behaviour would be different.
But if whether the BEE score is good or not has no impact on my bottom line
personally, then why worry about it? The unintended consequence of linking BEE
performance to pay is that it may lead people to focus on the short term, which also
increases the obsession with the points on the BEE scorecard.

People who have now become experts on BEE are senior managers. They are able
to work out what are the places for quick wins and what are the places where the big challenges lie. They can easily break the scorecard down to the cost per BEE point. For example, the cost of facilitating an ownership deal for a BEE partner might be valued at R100 million on the market, with a 20 percent discount making the net cost R80m to the BEE shareholder. Therefore, the cost of the discount to the existing
shareholders per BEE ownership point will be Rim. Contrast this with the cost of socioeconomic development (SED), which may be R20 000 per SED point. So there is a tradeoff that the management can calculate through creating a complex matrix that may help them maximise their points. Now the problem is the lack of balance
between the man at grassroots level, who may have no clue of how to partake in any BEE opportunities from lack of data, to corporate management who have extensive knowledge of how BEE works and can manipulate the codes to score maximum points. This is why a campaign such as the Department of Trade and Industry and National Empowerment Fund's "Eyethu Sonke Le BEE" project is needed to bring about a balance. This is a key step to ensure that BEE
reaches the intended beneficiaries in a meaningful way.