8.8 Black Economic Empowerment (BEE) Black Economic Empowerment (BEE) came into being as a tool to correct the Apartheid-induced imbalances in the South African economy. Prior to the democratic government taking over in 1994, Black people were expressly excluded from participating in the economy. The initial form of BEE was through the buying and selling of shares in companies that needed black ownership. Civil society bodies in the BEE environment proposed the creation of the BEE Commission to clearly define BEE. After much interaction, the Broad-based Black Economic Empowerment (B-BBEE) Act of 2003 was passed, and the resultant codes of good practice released. The terms B-BBEE and BEE are used interchangeably, but both now refer to the seven elements of BEE that include: · Ownership – At least 25% ownership by black people in economic entities with voting rights and a right to economic flows from the business. · Management – At least 40% representation in top management, not only as non executive directors. Targets include representation by black women as well. · Employment Equity – Representation by black people and black women in managerial roles in the company. · Skills Development – Companies are required to spend at least 3% of their payroll to train black people, black women, and black disabled people in priority skills for their industry. · Affirmative Procurement – Companies are required to purchase from BEE compliant suppliers, as well as from small businesses, black owned businesses, and black women owned businesses and black disabled people, · Enterprise Development – Companies are required to assist small black owned companies in their establishment, development, and sustainability as it is noted that the main way that BEE can be effective is if black entrepreneurs are supported and incubated in the initial stages of the business to increase the likelihood of their success. · Socio-economic Development – This element encourages companies to contribute in initiatives that bring black people into the mainstream of the economy, such as investing in education, rural development initiatives, and other similar initiatives. 59