This article gives a basic overview of Management Control, the maximum points achievable and some means by which to maximise your points for this element.
Business transformation is in the spotlight once again; in this case Employment Equity and the knock-on effect on B-BBEE has reference.
When reading this article keep the following inter-related legislation in mind:
Government Gazette Number 19370 – October 1998 Employment Equity Act 55 of 1998
Government Gazette Number 41922 – September 2018 Amendment Bill of Employment Equity Act
Government Gazette Number 37271 – January 2014 B-BBEE Amendment Act 46 of 2013
Government Gazette Number 42496 – May 2019 B-BBEE Amended Code of Good Practice
Government Gazette Number 41934 – September 2018 Mining Charter 2018
Government Gazette Number 19420 – November 1998 Skills Development Act 97 of 1998 (as amended)
Government Gazette Number 42060 – November 2018 National Minimum Wage Act 9 of 2018
The South African Cabinet recently approved submission of the Employment Equity Amendment (EEA) Bill of 2020 to Parliament for discussion after which it will be released for consultation.
The amended EEA Bill will regulate the setting of sector-specific employment targets to address the gross under-representation of black people, women and persons with disabilities.
Whilst sector-specific targets will be the norm there is a positive aspect in that the Bill also reduces the regulatory burden on small employers. Employers with less than 50 employees will no longer have to report on their employment equity targets, irrespective of their turnover.
In addition to these sectoral targets, the Employment Equity Plans also have to address the analysis, interpretation and re-mediation of income differentials across occupational levels and in terms of the vertical inequality of an organisation.
In order to score well in this element, companies should ensure that they employ predominantly black staff in its board participation, executive management, senior management, middle management, junior management and employees with disabilities.
Currently, the management control element of B-BBEE allows a maximum of 19 points on the scorecard, distributed over the management indicators.
In the management control and skills development scorecards the focus is on national demographics and the measurement of management (excluding the board of directors and executive management) is based on the overall demographic representation of black people as defined in the Regulations of the Employment Equity Act, i.e. Africans, Coloureds and Indians however once the amendment to the EE Act is promulgated the current national targets will be replaced by sector-specific targets but only after the Labour Minister has held consultations with the different sectors and set the targets of transformation.
Part of maximising points for Management Control on the B-BBEE Scorecard includes the measurement of voting rights of board members are broken down into black board members (2 points for 50% of all voting rights), black female board members (1 point for 25% of all voting rights), black executive board members (2 points for 50% of all executive board members) and black female executive board members (1 point), black senior management (2 points), black female senior management (1 point for 25% of all executive board members).
Further detail of the criteria and measurement is given in the table below.