An organisation’s Leviable Amount is defined in the fourth schedule of the Income Tax Act . It is the total amount of remuneration, paid or payable or deemed to be paid or payable by an employer to its employees during any month for purposes of determining the employer's liability for any employee’s tax in terms of that schedule, whether or not such an employer is liable to deduct or withhold such an employee’s tax.   Essentially, the determination of an organisation's Leviable Amount is based on its payroll. Therefore, only employees on the payroll determine the variable amount of Skills Development over an organisation's measurement period. Thus, an employer must use the total amount of remuneration to determine the Skills Development Levy.   As per the 2008 Verification Manual, the source of evidence of an organisation's Leviable Amount would be payroll documentation, EMP201s or EMP501 and its annual statement.   Skills Development Services  are available to guide members on any issues relating to their Leviable Amount.

ABC Traders decides to use a third-party facilitator to distribute Enterprise Development funds to Beneficiaries. The money to the third-party facilitator was transferred two weeks before its Financial Year ended in December 2023. However, the third-party facilitator only transferred the funds to the end Beneficiaries at the end of January 2024.   When using the services of a third-party facilitator, when does Enterprise Development spend be considered a claim? Is it when the third-party facilitator receives the funds or when the end Beneficiary receives the funds?   An Enterprise Development contribution is only considered as recognised spend when it reaches the end Beneficiary. Therefore, in this instance, where the third-party facilitator distributed the funds outside the Measurement Period, ABC Traders may only claim the amount paid out in January 2024 in the next Measurement Period.   Enterprise Development Services  are available to assist Members on how to engage with Third-Party Facilitators

As per Schedule 1 of the Amended Construction B-BBEE Sector Codes of Good Practice, “Professionally Registered Person”  Or “ Registered Professional ” is defined as:   Professional means a suitably qualified practitioner requiring statutory registration with a recognised and authorised Council or Body in the Built Environment of South Africa; that monitors and regulates competency, codes of ethics and continuing professional development. Once registered as a Professional this person is authorised to practice in a field of expertise and is known as a “professionally registered person” or “registered professional”   The Construction Sector Charter Council (CSCC) has recently published an updated list of Recognised Professional Registration Councils  in accordance with CSC Statements 200 and 300 of the Amended Construction B-BBEE Sector Codes of Good Practice.   Technical Services  are available to guide Members in the Construction Sector in understanding these requirements.

There have been numerous instances whereby B-BBEE Rating Agencies have sought to misinterpret the provisions of the Amended Construction B-BBEE Sector Codes of Good Practice of 1 December 2017, by verifying a Measured Entity using a financial period that ended in excess of 12 months from the date of measurement and subsequent issue.   The Construction Sector Charter Council (CSCC) Technical Review Committee publishes Practice Note 0002A  to clarify the concept of Measurement Period under the Amended Construction B-BBEE Sector Codes of Good Practice.   Technical Services  are available to guide Members in the Construction Sector in understanding these requirements.

The Financial Sector Transformation Council (FSTC) has recently issued a Formal Notice  calling for the submission of B-BBEE Reports for the measurement period from 01 December 2022 to 30 November 2023. This requirement aligns with the stipulations set forth in Section 10 (4) of the B-BBEE Act 53 of 2003, as well as Statement FS 000, Paragraph 8.5 of the Financial Sector Code (FS Code) which mandates each financial institution engaged in business activities within the South African financial sector to provide an annual report to the FSTC, outlining their progress in implementing the provisions of the FS Code.   Reporting Notice 01 of 2024  contains details of how Entities need to report.   Technical Services  are available to guide Members in the Financial Services Sector on reporting requirements.

A Needs Analysis is a formal, systematic process to identify and evaluate an organisation's business needs. It is specific to an individual or group of employees, customers, or B-BBEE Beneficiaries. Deficiencies identified in the outcome of such an analysis are often referred to as ‘gaps’. In other words, the difference between what is currently done and what should be done.   A Needs Analysis is vital for rolling out a successful Enterprise Development or Supplier Development programme. The BEE Chamber has created a generic template that members can easily adapt to suit their circumstances.   Enterprise & Supplier Development Services are available to assist members in creating a customised Needs Analysis template according to their gaps or needs.

The 5 Bonus Points for Skills Development in exchange for meeting Absorption targets can meaningfully impact an organisation’s overall B-BBEE Scorecard. At a B-BBEE Verification, an organisation will be measured against c lause 2.1.3 of Statement 300   of the Amended General B-BBEE Codes of Good Practice , which states:   "Number of ‘Black’ People absorbed by the Measured and Industry Entity at the end of the Internship, Learnership and Apprenticeship programme under Paragraph 2.1.2.1"   Skills Development Services  are available to guide members in accessing the Bonus Points on offer.  Please note that the General Amended B-BBEE Codes of Good Practice requirements may differ from those of the B-BBEE Sector Codes of Good Practice.

Additional enhancements are available for organisations that procure from EMEs and QSEs with more than 51% ‘Black’ Ownership that are Supplier Development Beneficiaries. Paragraph 3.5 of Statement 400  of the Amended General B-BBEE Codes of Good Practice states:   “If a Measured Entity procures goods and services from a supplier that is:   3.5.1 A recipient of supplier development contributions from a Measured Entity under Code series 400 which has a minimum 3-year contract with the Measured Entity, the recognisable B-BBEE Procurement Spend that can be attributed to that Supplier is multiplied by a factor of 1.2;   3.5.2 A Black-owned QSE or EME which is not a Supplier Development beneficiary but that has a minimum 3-year contract with the Measured Entity, the recognisable B-BBEE Procurement Spend that can be attributed to that Supplier is multiplied by a factor of 1.2; and   3.5.3 A supplier to the Measured Entity that is at least 51% Black-owned or at least 51% Black Woman-owned utilising the Flow Through Principle, the recognisable B-BBEE Procurement Spend that can be attributed to that Supplier is multiplied by a factor of 1.2”.   A reminder, a Supplier Development Beneficiary that elevates from an Enterprise Development Beneficiary allows an organisation to claim the 1 Bonus Point on offer.   Enterprise & Supplier Development Services  are available to guide Members on enhancements under Enterprise & Supplier Development.

A B-BBEE Verification is based on the evidence presented. Therefore, when entering into an agreement with a Beneficiary, a contract must incorporate all evidential requirements. Although parties do not enter into an agreement with the mindset that things will go wrong, the mitigation of risk must drive such an agreement. Consequently, generic Beneficiary contracts do not apply to all.   It is vital that an organisation highlights all the benefits in the agreement as well as how evidence is presented for a B-BBEE Verification at the date of signature. Challenges often occur when an organisation identifies benefits by default, following the signing of a contract. One may not synchronise the date of agreement to suit a benefit later revealed.   Enterprise & Supplier Development Services  are available to guide members on the contractual requirements for this element.

Ola Leepile | 18 March 2025 For financial services firms, ticking boxes to achieve top Broad-Based Black Economic Empowerment (BBBEE) status is not the same as genuine transformation.  This is especially evident in the asset management industry, where companies are falling short in advancing black professionals.  There is one way to address this issue. Sitting between the custodians of trillions of rands in pension funds, and those responsible for managing these assets, are asset consultants – the gatekeepers of capital allocation. Asset consultants provide institutional investors, such as retirement funds, with investment advice, including the vetting, selection and recommendation of asset managers.  Their role is to research the market, evaluate the best asset managers, and present a shortlist to trustees, who then decide who will oversee their members’ savings. These asset consultants should do the above while taking into account the importance of true transformation.  However, for most financial services firms, transformation remains an immense challenge. According to a report released last year by the Association for Savings and Investment South Africa (Asisa), asset managers missed all their employment equity targets in 2022, with roles still dominated by white men.  While black managers accounted for 41% of senior roles in 2022, when broken down, black Africans only made up 13% of those, against a target of 52%.  In middle management, they accounted for 18% of the total, short of the 65% target.  Black Africans and overall black women in junior roles fell. Within this context, a responsible asset consultant must present trustees with at least two or three viable options rather than a single pre-determined choice (which we at Novare have often encountered among some competitors in the marketplace).  Trustees, in turn, must ensure they are comfortable that their consultant has conducted a rigorous due diligence process. More than just facilitating the selection of a manager, asset consultants should guide trustees in asking the right questions and making informed decisions.  While the final accountability lies with the trustees, asset consultants must ensure they equip their clients with the knowledge necessary to make sound investment choices. Prioritising transformation Transformation in the asset management industry is often deprioritised unless it is explicitly included in a fund’s mandate.  Performance should be a non-negotiable for retirement funds, but trustees should also give consideration to how their investment decisions could drive broader economic change. Of course, risk and returns remain paramount – this is pension money, after all.  But once those criteria are met, transformation should be integrated as a core component of the asset manager selection process.  Asset consultants and multi-managers are uniquely positioned to influence this shift.  Consultants make the recommendations, while multi-managers – who operate with discretionary mandates – make allocation decisions by determining which money manager funds will flow to.  Without asset consultants putting transformed managers in front of trustees, these firms stand little chance of securing mandates. How Novare approaches transformation At Novare, when onboarding an institutional client, our first step is to review the fund’s investment strategy to assess its appropriateness.  This includes analysing the fund’s demographics, helping trustees set objectives, and quantifying each goal with specific targets. From there, we develop an asset allocation strategy, which informs our selection of asset managers.  Our criteria for assessment, honed through years of asset consulting and multi-management experience, prioritises risk-adjusted performance.  However, we go further by integrating transformation as another consideration. By the time we present our recommendations to clients, we ensure that selected asset managers meet both traditional investment criteria and meaningful transformation benchmarks.  When clients prioritise transformation or actively drive the agenda, we integrate it into our screening and selection process, applying additional layers of assessment to identify truly transformed managers. Transformation is not just about ownership; we also assess the diversity of management teams, gender representation, and the firm’s commitment to developing young professionals. While pension funds rightfully prioritise risk-adjusted returns, there is a persistent misconception that transformation and performance are mutually exclusive.  A diverse investment team brings a broader range of perspectives, enhances decision-making, and reduces cognitive biases, ultimately leading to better long-term results.  Besides, it must be remembered that one year of outperformance doesn’t make for a trend. Asset consultants should not view transformation as an add-on but as a critical component of a well-rounded investment strategy.  By systematically including transformed managers in selection processes, consultants help trustees access a broader talent pool while maintaining high-performance standards.  The role of consultants is to challenge outdated assumptions and ensure that the best managers are given a fair opportunity to compete. Novare – a transformed asset consultancy For asset consultants to credibly drive transformation, they must first embody the change they advocate.  A consultancy that remains untransformed cannot credibly advise clients on diversity and inclusion while failing to reflect these principles internally.  We take our internal transformation and that of the industry very seriously.  Recently, Novare won the Association of Black Securities and Investment Professionals’ (ABSIP) Best Multi-Manager or Asset Consultant of 2024 award. The award recognised Novare’s reach into sub-Saharan Africa, our richness of decision-making and experience, and the technology supporting these outcomes.  In evaluating the entries, ABSIP also considered how Novare is investing in its own capabilities to benefit others and the proportion of funds we allocate to Black managers. We are proud of this achievement because, in reality, if asset consultants and multi-managers uphold the status quo, the rest of the industry will remain unchanged.  We should all walk the talk by selecting and recommending performing managers who are pro-transformation, to ensure we are investing in the future of pension fund members and our country. Asset consultants, however, hold the keys to the wider industry.  They are the bridge between pension fund capital and the future of South Africa’s asset management industry. By integrating transformation into their selection process, they have the power to reshape the industry’s leadership landscape.  The question is: will they step up or continue to reinforce the status quo? ‘Disclaimer - The views and opinions expressed in this article are those of the author(s) and not necessarily those of the BEE CHAMBER’. https://businesstech.co.za/news/industry-news/817408/why-asset-consultants-must-drive-fund-management-transformation/

Many organisations opt to use third parties in the implementation phase of their B-BBEE Strategy, which B-BBEE Legislation allows for. However, an organisation may only claim the spend from the time the Beneficiary, not the third-party facilitator, receives it. In addition, a B-BBEE claim is reserved for the originator of the funds and not the third-party facilitator. Essentially, a B-BBEE Verification will follow the money and evaluate the claim from the time it reaches the end Beneficiary.    Scorecard Monitoring Services  are available to guide members on third-party facilitators.

Critical points are lost on the Preferential Procurement Scorecard of many organisations, as they are unfamiliar with the requirements of specific B-BBEE Sector Codes of Good Practice. For example, if a supplier operates in the tourism sector and then presents a B-BBEE Certificate or Sworn Affidavit based on the General Amended B-BBEE Codes of Good Practice instead of the Tourism B-BBEE Codes of Good Practice, it is invalid. Unfortunately, the extent to which this happens only reveals itself at the time of an organisation’s B-BBEE Verification.   A supplier may not choose the Code of Good Practice against which they are measured. The rule is that an organisation qualifies to be measured on the Codes of Good Practice of the sector from which most of its income is derived.   However, confusion often reigns when suppliers present B-BBEE Credentials across sectors. For example, ABC Construction is an organisation measured on the Amended Construction B-BBEE Sector Codes of Good Practice. They book accommodation at the XYZ Hotel. The B-BBEE Credentials presented for the accommodation must reflect the Amended Tourism B-BBEE Sector Codes of Good Practice against that criteria. The procurement person at ABC Construction should know that XYZ Hotel’s B-BBEE Credentials must align with the Amended Tourism Sector B-BBEE Codes of Good Practice. In addition, it is imperative that those in procurement are aware of the total revenue thresholds, targets and the Weighting Points of all B-BBEE Sector Codes of Good Practice, as they, in some cases, differ from the General Amended B-BBEE Codes of Good Practice   Support Services  are available to guide members on specific requirements for B-BBEE Sector Codes of Good Practice.