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Narrow-based empowerment is achieved by scoring BEE points in the areas of black ownership, and black control - i.e. black executive management (e.g. director level). During the transitional stage, defined as a period of one year from the commencement of the Codes of Good Practice (9 February 2007), this method remains an acceptable interim means of achieving a BEE status. The score thus achieved, is converted to a broad-based score by applying a standard formula.
Broad-based empowerment is accepted as the only meaningful way to broaden the country's economic base, and to accelerate growth, job creation and poverty eradication. It is achieved through transformation in the areas of ownership, management control, employment equity, skills development, preferential procurement, enterprise development, and socio-economic development, seven elements in all.
An enterprise, which is a subsidiary company, is part of a group of associated companies, or a franchisee within a franchise group, cannot be measured as part of its group, and BEE compliance must therefore be measured at its own entity level.
Measurement of a business entity's BEE compliance will be carried out in accordance with a scorecard. Government's (DTI's) generic scorecard, as contained in the Codes of Good Practice, consists of the following seven elements:
The Scorecard
| Element |
|
Weighting |
| Ownership |
|
20 |
| Management Control |
|
10 |
| Employment Equity |
|
15 |
| Skills Development |
|
15 |
| Preferential Procurement |
|
20 |
| Enterprise Development |
|
15 |
| Socio-Economic Development |
|
5 |
100 |
For more information on the above go to the Codes of Good Practice.
The different sector Transformation Charters each contain a scorecard that, generally speaking, is modeled on the above generic scorecard. Interim and final targets are set against which organisations will measure BEE compliance, on an ongoing basis, for the duration of the ten-year transformation period.
Based on the overall perfomance of a measured entity using the Generic Scorecard, it receives one of the following B-BBEE Status:
| B-BBEE Status |
|
Qualification (Scorecard Points) |
|
B-BBEE Recognition Level |
| 1 |
|
> 100 |
|
135 % (e.g. R1 = R1.35) |
| 2 |
|
> 85 but < 100 |
|
125 % |
| 3 |
|
> 75 but < 85 |
|
110 % |
| 4 |
|
> 65 but < 75 |
|
100 % (e.g. R1 = R1) |
| 5 |
|
> 55 but < 65 |
|
80 % |
| 6 |
|
> 45 but < 55 |
|
60 % |
| 7 |
|
> 40 but < 45 |
|
50 % |
| 8 |
|
> 30 but < 40 |
|
10 % |
| Non-Compliant |
|
< 30 % |
|
0 % |
|
