This week, I will explain ownership and management control. Once you have an understanding of exactly what these elements mean in BBBEE terms, I shall then explain the typical evidence that an analyst would need from your company to prove compliance in each.
OWNERSHIP – quite simply looks at black shareholding in an enterprise. Although, ownership structures and shareholders rights can get very complex which is why it is very important to provide the correct evidence to prove these type of ownership structures. The following list outlines the documents an analyst would typically require to verify the ownership element:
- List of shareholders
- Share certificates
- Shareholders agreement
- Certified ID copies of shareholders
- Most recent loan agreements (If money has been borrowed to a shareholder to purchase the shares)
- All company registration documents
MANAGEMENT CONTROL- This element of the scorecard measures black participation in the top levels of management within the organization. This includes the board and the most senior executive managers in each area of the business.
Something important needs to be taken into account with this element and that is the adjusted recognition of gender (ARG). This is a calculation which takes into account the participation of black women and can be explained simply with the following formula:
ARG= (%black representation/2) + % black women representation.
The following list outlines the documents an analyst would typically require to verify the management control element:
- Company organogram
- Company registration documents
- Memorandum and articles of association
- Employee contracts of black top managers
- Pay slips of top managers
- Certified ID copies of top managers.
It is extremely important to note that the above definitions and explanations have been simplified for easy understanding. The above information also does not distinguish between GENERIC and QSE companies, where their scorecards do differ and score different aspects of each element.
Next week we will have a look at Employment Equity and Skills development and provide you with the general evidence requirements for verification.
Note that I am a BEE analyst and I do offer the verification service. We have extremely competitive rates and our turn around time is great. So, get my details on the contact page and get in touch with me.
I look forward to hearing from you so that we can get your rating process started.
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