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measures aim to ensure that our approach to transformation increases investor confidence. They aim also to reinforce progress against established transformation goals. These three measures target directly the three perceptions of risk that can arise from the wrong approach to transformation: Lack of certainty and clarity in the operating environment Limited sense of partnership with business Lack of confidence in the future sustained value of investments Agree a National Transformation Scorecard (and stick to it) Create investment incentives, linked to transformation performance Communicate and adopt a comprehensive plan to close the perceived “BEE funding gap” 1. Agree a National Transformation Scorecard (and stick to it) Investors require the certainty that clear and realistic targets for transformation can provide. Once set, investors must also have the confidence that these targets will not be changed. The Strategy for Broad-Based Black Economic Empowerment, together with the individual sector charters that are being developed, represents page 19
eal progress. At the national level, our Government has adopted an approach based on guidelines rather than legislation. Terms are now better defined. A balanced scorecard with four elements has been developed: • Direct empowerment (30% weighting): Equity Ownership and proportion of Black executive and Board level management • Human resource development (30% weighting): Employment equity and skills development • Indirect empowerment (30% weighting): Preferential procurement to Black firms and enterprise development • Tailored by enterprise or sector (10% weighting) Most importantly, the scorecard recognises that black ownership is just one element of transformation. Progress in other areas (e.g. human resource development, indirect empowerment) is equally, if not more, important in delivering transformation at the grassroots level. Greater flexibility on targets for black ownership will ease the pressure on available funds (although more still needs to be done) and reduce the risk of BEE deal failures down the line. A National scorecard's power lies in providing a basis to create a competitive advantage for those firms that transform The balanced scorecard, defined in the Strategy for Broad-Based Black Economic Empowerment, provides an ideal mechanism to define national page 20
Page 1 and 2: BRENTHURST DISCUSSION PAPER 8/2007
Page 3 and 4: INTRODUCTION By NICKY OPPENHEIMER E
Page 5 and 6: South Africa’s economic advanceme
Page 7 and 8: to transformation, could become an
Page 10 and 11: OUR UNIQUE CHALLENGE Effective tran
Page 12 and 13: And this is the nub of the challeng
Page 14 and 15: Fig. 2. Perceptions of risk constra
Page 16 and 17: Investors were reacting to what the
Page 20 and 21: standards for transformation, appli
Page 22 and 23: China, for example, has used a mix
Page 24 and 25: Africans no longer see value in mak
Page 26 and 27: Fig. 5. Sizing the BEE funding requ
Page 28 and 29: • Establishing incentives to crea
Page 30 and 31: What is certain is that inaction is
Page 32: Acknowledgement We would like to th

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