U4 ch9 Flashcards
What is the main premise of BBBEE?
To improve the participation of Black people (African, Coloured, and Indian South Africans) in the economy through economic transformation.
What does BBBEE aim to achieve in relation to the South African Constitution?
It aims to achieve the constitutional goal of substantive equality and equality of opportunity by addressing historical inequality.
How is BBBEE related to other South African legislation like the EEA and the Skills Development Act?
BBBEE principles relate to economic empowerment, and affirmative action measures under these laws can assist businesses in meeting BBBEE requirements
What is the difference in focus between BBBEE and affirmative action?
Affirmative action ensures workforce diversity, while BBBEE focuses more on diversity and representation in business ownership and management.
What is the main objective of the BBBEE Act?
To enable Black South Africans to participate in the economy.
List three objectives of the government’s BBBEE policy.
-Empower more Black people to own and manage businesses.
-Promote access to financing for Black economic empowerment.
-Ensure that Black-owned businesses benefit from preferential procurement policies.
What defines a Black-owned business under BBBEE?
A business where at least 51% is owned by Black people, and Black people substantially manage and control the business.
Name three sources of rules governing BBBEE
-Broad-Based Black Economic Empowerment Act, 2003.
-General BBBEE Codes of Good Practice.
-Sector-specific BBBEE Codes.
What is the relationship between the BBBEE Act and the BBBEE Codes?
The BBBEE Act provides the framework, and the detailed regulations are set out in the Codes.
What does “broad-based” in BBBEE mean?
It refers to the empowerment of all Black people, not just a wealthy elite, through integrated socio-economic strategies beyond just ownership.
List two elements included in the definition of broad-based Black economic empowerment.
Increasing the number of Black people who manage, own, and control enterprises.
Achieving equitable representation in all occupational categories and levels.
What are BBBEE Codes, and when must they be applied?
They are the detailed rules for BBBEE compliance, and State institutions must apply them unless it’s unreasonable to do so.
Why is BBBEE considered “broad-based”?
It includes economic strategies that empower women, workers, youth, people with disabilities, and rural communities.
What role does human resource development play in BBBEE?
It is one of the socio-economic strategies aimed at empowering Black people through skills and workforce development.
What is the primary aim of the BBBEE scorecard method?
To ensure consistency in measuring empowerment and align how different governmental departments and agencies apply empowerment policies.
Is it compulsory for all businesses in South Africa to comply with BBBEE legislation?
No, there is no general requirement for all businesses to comply, and there are no sanctions for non-compliance.
What are the advantages of complying with BBBEE requirements?
Better business opportunities, access to state contracts, and contributing to the South African economy.
What is an Exempt Micro Enterprise (EME) in terms of BBBEE?
A business with an annual turnover of less than R10 million, which can receive an automatic BBBEE level based on Black shareholding.
What is a Qualifying Small Enterprise (QSE) in terms of BBBEE?
A business with an annual turnover between R10 million and R50 million, which may receive an automatic BBBEE level based on Black shareholding or must undergo a scorecard audit if Black shareholding is less than 50%.
What must Generic or Large Enterprises do to determine their BBBEE level?
They must undergo a scorecard audit to determine their appropriate BBBEE level and rating.
How are BBBEE scores determined?
Based on five elements: ownership, management control, skills development, enterprise and supplier development, and socio-economic development, using historical information from the previous financial year.
What is the highest BBBEE level a company can achieve?
Level 1 is the highest BBBEE status.
What is fronting in the context of BBBEE?
An intentional circumvention or attempted circumvention of the BBBEE Act and Codes to falsely improve a company’s BBBEE status.
What are examples of BBBEE fronting practices?
- Listing low-salaried Black employees as directors.
-Listing Black employees as executives or shareholders without their knowledge.
-Excluding Black managers from high-level decision-making processes.
