BBBEE is a programme launched by Government to redress the inequalities of Apartheid, by giving certain previously disadvantaged groups (“black people” ie Black, Coloured, Indian, and Chinese people who arrived before 1994) access to economic freedoms previously not available to them. It is regulated by the BBBEE Act 53 of 2003 as amended.
In October 2013, the revised Broad-Based Black Economic Empowerment (BBBEE Codes or Codes) Codes were gazetted by the Minister of Trade and Industry (DTI). In April 2015 these (new) Codes will come into operation (“new codes”) .
It is threfore crucial for businesses to not only understand these codes, but also to consider strategies that would facilitate compliance simultaneously with the new codes becoming effective in April 2015. That way, businesses would comply, remain competitive and not run the risk of losing clients or work (suffering losses) due to not being compliant.
Employee share schemes aim to empower the black employees of the business concerned by making them minority shareholders or owners in the business. These are in my view, not always the “right fit” for every business. I hold this opinion for a number of reasons as i will set out below. Even with that said, where these are appropriately structured these are absolutely invaluable vehicles to not only comply with BBBEE but to motivate and retain valuable “black” staff.
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