CITIZEN.CO.ZA - BUSINESS NEWS / 03 JULY 2019 - 07.16 / ANA
Only 43% of JSE listed entities and 10% of organs of state submitted their annual compliance records for 2018, with most entities failing to comply.
The Broad-Based Black Economic Empowerment (B-BBEE) Commission said on Wednesday that there had been no significant change in the levels of transformation in the country.
Black economic empowerment. Picture: werksmans.com
The results were found in the commission’s annual report on the national status and trends of broad-based economic empowerment.
Only 43% of JSE listed entities and 10% of organs of state submitted their annual compliance records for the 2018 calendar year, with the majority of entities failing to comply.
“This year’s report shows no significant change in the levels of transformation, with black ownership reflecting a decline to 25.2% black ownership from 27% in 2017, and management control still sitting at 38% for black people,” said the commission.
Section 13G of the B-BBEE Act makes it compulsory for all JSE listed entities, organs of state, public entities and SETAs to submit compliance reports on B-BBEE to the commission.
The commission analyses the compliance reports and releases its own report in the first quarter of the financial year each year.
The findings of the analysis for the 2018 calendar year, compared to 2017, indicated no significant improvement as only 43% (51% – 2017) of JSE listed companies and 10% (1% – 2017) organs of state complied with the reporting requirement.
Non-compliant entities could be referred for prosecution, said the commission, as the “worrying trend” was undermining the objectives of the Act.
The report is based on information that was submitted to the commission for the period 1 January 2018 to 31 December 2018, as well as 1674 B-BBEE certificates captured on the B-BBEE Portal for 2018.
The report results show that Black Ownership is at 25.2% (27% -2017) and Black Women Ownership at 10.1% (9% – 2017).
As in 2017, only 38% (male – 21.63%; female – 16.76%) of JSE listed entities’ board control is held by black people and the majority at 61.61% is held by white people and foreign nationals.
The 2016 report indicated 30% (male – 18%; female – 12%) black South Africans held directorship on listed entities.
JSE listed entities achieving at least B-BBEE contribution level 4 had increased by 10.9% compared to 2017. The analysis indicated that 50.93% (40% – 2017) of entities were level 4 and higher, while 44.48% (60% – 2017) entities were between level 5 and non-compliant.
State organs that reported showed that 59% rated between level 2 and level 7, while 41% were level 8 to non-compliant B-BBEE status.
“The low level of reporting and the slow pace of improvement in B-BBEE elements is a concern, but the B-BBEE Commission welcomes that B-BBEE compliance is now part of the audit scope of the Auditor-General and also that annual B-BBEE reporting is a listing requirement on the JSE. Therefore, with these interventions and the enforcement action of the B-BBEE Commission, reporting and the extent of B-BBEE implementation is expected to improve,” said the commission.
The commission has started conducting site visits on the reports submitted, which is part of the verification of the accuracy of the reports as well as identifying best practices to share with other measured entities.
“The B-BBEE Commission appreciates the level of cooperation already shown by measured entities on the site visits conducted thus far. The B-BBEE Commission remains available to assist those who require advice on B-BBEE for free,” it said.
The report can be found at:
LINK : https://citizen.co.za/business/business-news/2150345/no-significant-change-in-transformation-levels-says-b-bbee-commission/
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER