BEE tops SA companies’ agenda

23 March 2006

South African business owners report a 19 percentage point increase in the importance of black economic empowerment (BEE) in winning business, according to consulting firm Grant Thornton’s International Business Owners Survey 2006.

According to Grant Thornton, 70% of South African business owners interviewed in the 2006 survey indicated that black empowerment was a key issue for them in winning business – up from 61% in 2005 and 51% in 2003.

The annual survey tracks the trends and opinions of some 7 000 business owners in 30 countries. In South Africa, the survey was conducted by Research Surveys among 300 business owners employing between 50 and 250 staff.

The survey indicates that business owner opinion on the importance of BEE is on the rise across all regions and business sectors in the country.

In Gauteng, 73% of respondents reported that BEE was an issue in winning business, followed by 72% in Durban, 67% in Cape Town and 59% in East London and Port Elizabeth combined.

In the construction sector, 91% of business owners indicated that their BEE status was having a significant impact on gaining new clients (up from 72% in 2005), followed by 69% of business owners in the retail sector (54% in 2005), 78% in the service industry (71% in 2005) and 56% in manufacturing (51% in 2005).

When business owners were asked whether their business was aligned to any BEE charter or scorecard, 66% responded positively.

More broad-based approach
According to Grant Thornton, South African business owners also seem to be adopting a more broad-based approach to BEE, with 63% of respondents identifying skills development and 67% identifying employment equity as “very important” aspects of their BEE strategy.

This compared with 53% for the ownership aspect of BEE, 49% for the management aspect and 46% for affirmative procurement.

“It is encouraging that, increasingly, business owners are shifting their focus away from only addressing equity ownership as part of their BEE strategy and incorporating broad-based empowerment structures,” Grant Thornton’s Lee-Anne Bac said in a statement.

“What these results reflect is that business owners are focusing on developing and grooming people to move up the ranks, which is in line with the whole BEE rationale.”

In spite of this, Bac said, there was “still a misunderstanding that ownership is the only aspect of BEE, with mid-sized businesses still feeling pressure from their clients to comply with the ownership aspects of BEE scorecards.”

SouthAfrica.info reporter