Paul Janisch

Consulting, opinions and speaking engagements and a few other topics that I know quite a lot about

If you are looking for a realistic perspective of empowerment in South Africa and southern Africa (including Namibia, Zambia, Zimbabwe and Botswana), I am able to provide that perspective at your AGM or any other presentation. It's relatively clear from this blog that I know what I'm talking about. Over the last 20 years I've gained a very thorough understanding of the following topics

• Government procurement
• Parastatal procurement
• BEE trends within Africa
• Impact of BEE legislation
• Multinationals and empowerment within Africa

And I am very happy to provide you with an overview of these topics.

In addition I have consulted to a wide number of public and private organisations throughout South Africa on

• Public Private Partnerships
• Listed shareholding analysis
• Tax advice on BEE initiatives and tax structures (through a partner)
• Opinions on empowerment commitments that may be contractually binding
• BEE plans for tenders
• Joint Venture BEE certificates
• General opinions (similar to this one)

Or if you need someone to come in and find those points within your organisation for your next verification please contact me and we can discuss what is required. You can email me or phone me on (+2783) 227-1375.

Even if you spend the money we discussed in last week’s email and still don’t get to a level 8

We’ve been writing about the Property Practitioners Regulatory Authority (PPRA) and their irrational decision to only award or renew a Fidelity Fund Certificate (FFC) to a level 8 BEE contributor, over the last few weeks.

Last week we showed that a level 8 certificate could cost an estate agency whose turnover is R10m about R211,000 per year.  But spending the money doesn’t mean that you will actually get a level 8 certificate.  And it’s very clear that the PPRA, specifically Thato Ramaili have little or no understanding about the workings and pitfalls of BEE. 

BEE Compliance is ridiculously complex and expensive.

The Property BEE code is unnecessarily complex, we’ve simplified it for this email.  It states that if your turnover is in excess of R2.5m then you need to implement a full BEE scorecard to become compliant (unless of course your turnover is between R2.5m and R35m and you are at least 51% black owned – then you are automatically a level 2).  But if you don’t have at least 10.1% black ownership (the target is 25.1%) then you will drop a level.  This means that to get to a level 8 you in fact have to get to a level 7.  A level 8 is 40 points and a 7 is 55 points, that’s a substantial difference in points.  The table below is a summary of the scorecard.

ELEMENT	POINTS	COMMENT
Ownership	27	Target is 25.1%, but you would need a minimum of 10.1% to not drop a level. However 10.1% will give you about 12 points in total
Management Control	9	Requires black people at board level. The target is 50%
Employment Equity	11	Black representation at senior, middle and junior levels in the business. Target is 60%
Skills Development	17	Spend on the training of black people.  We showed last week that this is R180,000
Enterprise and Supplier Development	35	We look at the BEE scorecards of your suppliers and the money you’ve given to help black owned businesses become sustainable
Socio-Economic Development	2	Donations to black charities
Economic Development	4	The good news is that this is not applicable to Estate Agents
TOTAL	105

This is probably what a typical mid-size estate agency could look like

Element	Sub element	Likely points awarded
Ownership		0
Management Control		0
Employment Equity		3
Skills Development		17
Enterprise and Supplier Development	Procurement	10 (out of 25 points)
	Enterprise Development	5 (out of 5 points)
	Supplier Development	5 (out of 5 points)
Socio-Economic Development		4
TOTAL		44 points

That’s 11 points short of the 55 points you need because there is no ownership.

Or you could use the Ownershield system to get to level 2 at about 2/5ths of the total cost we discussed last week.

Free Property BEE Seminar – 13 June 2024

Ownershield is hosting a free one hour on-line seminar at 10:00 on Thursday the 13^th of June 2024 discussing compliance complexities and simpler, reversible solutions.  Please email us to book and feel free to invite as many people as you like, if necessary we will arrange a second seminar. We can accommodate 100 people at a time.

Why skills continuity and retaining corporate memory is so important

A recent article in a South African publication discussed how certain public officials fear losing their jobs after the conclusion of the 2024 South African general elections.   The article discussed how certain people had been employed by the most dominant party and this party was likely to lose its dominance.  This has not happened in South Africa for 30 years, most people felt that their jobs were secure.

The problem for the citizens in that province is that if new people in upper management are brought in to replace those political appointees they could  probably have no understanding how that provincial administration is supposed to work.  And because the outgoing administration hasn’t implement an Intraternship programme the employees under them will not know how to train the new appointees.   This has a major impact on the citizens of that province.  This is probably not the impact an incoming political party wants to have on their voters and rate payers at the outset.

Corporate continuity is not only important to government departments.  It is just as applicable to companies that have been subject to a merger or acquisition.  The new owner may want to rationalise jobs and will do so through a series of interviews that don’t actually discuss how that person understands the job that it is interviewing internal people for.  There is a lot more to interviewing a person who is hoping to retain their job after an acquisition.  Traditional interviewing techniques can never covering this.  But examining the records of the Intraternship programme will show how that person works in the team with the people below and above them, and most importantly how adaptable they have been when it comes to innovations proposed by the people in the same Intraternship programme.

Intraternships extend even further than that.  A shareholder may want to know that there is a culture of internal learning in the organisation that encourages innovations that lead to more cost effective delivery of that company’s mandate. 

This is the reason why RISE TRAINING AND DEVELOPMENT issue a  RISE CERTIFICATE OF CONTINUITY (RCC) at the completion of every Intraternship programme.  This offers shareholders and stakeholders assurance that if there any major changes in personnel the work can continue and that the new people will be up and running in a much shorter period of time, whether they occupy executive positions or lower.

A Free Seminar

The response to the emails we have sent out has been incredible with many people requesting a follow-up seminar.  We think this is a good idea and will be hosting a free online seminar on the 20^th of June 2024 at 10:00 Central African time.  If you would like to attend please click on the email link and let us know how many people would like to attend.  We’ll confirm your attendance.  We are restricted to 100 people but will arrange a second seminar if the demand is greater.

Click on the email link to confirm your attendance. 

Training the trainer to respond to innovation

All of us are natural trainers. It’s a talent we were born with. Not all of us are natural trainers when it comes to imparting information in the workplace. This is a learned process.

Imparting knowledge is a vital component of our learning existence. We do this at school when we write exams. As leaders of a sports’ team it’s imperative that we get messages across to the team with urgency and in such a way that the members of the team answer it.

The workplace is different. There are many agendas, egos and positions that needs to be considered. In the past it was simply a matter of transferring knowledge in a one to many fashion. This has all changed because of the pace of change and the multiple means of knowledge acquisition. For a trainer to be effective, that trainer needs to know that they are experts in their field but there are people around them that may have mastered a certain aspect of the job that the trainer and colleagues may not be aware of. This could be critical information that everyone in the seminar room could benefit from. In fact this two way transfer of knowledge must be encouraged and nurtured. It’s not unusual for the trainer to feel threatened by this expertise. Embracing this transfer leads to three desired outcomes.

• It introduces innovations in the workplace
• Creates a greater level of respect between colleagues
• Should lead to efficiencies in the workplace that may not have been considered in the past

We have found that the EXCHANGE method of training the trainer to be the best approach when it comes to developing and encouraging INNOVATIONS in the workplace.

EXCHANGE is made up eight components

Engage	Start out with an open mind by letting the people in the room that you are an expert but not an expert in everything
eXplore	Look for ways to train and to receive information
Challenge	Put concepts out to the room. Ask for ideas. Debate as to how these ideas can be incorporated in the workplace
Habits	We are looking to nurture new habits and to understand how existing habits can be improved. Habits can lead to complacency. But habits can be removed
Adapt	Adaptation is key. Some adaptations may take a while and require new technology. Most habits require a minor change in attitude
Normalise	Innovations must become a normal part of performing a task or job. Getting the buy-in of all the players requires normalisation
Grow	The trainer wants their team to grow in confidence and in turn they themselves will grow in confidence because everyone is benefiting from the process
ReinforcE	Reinforce these innovations over a 12 month process through seminars and training sessions. Each session looks to improve on the session before

Each person on this programme is regarded as an intern known as an INTRATERN. This is not casual on-the-job training, it is formalised programme that rewards each person with a certificate of accomplishment. Something that makes that person more useful in the workplace. It can be used for promotion purposes too.

To learn more go to Rise Training's website

If you have found this bulletin useful please forward it onto everyone in your organisation that you feel could benefit from these emails

Emulation leads to innovation, this applies to the workplace as well

All of us are a product of emulation. We learn to perform almost every function by copying someone. We’ve been doing this since we were infants. By the same token everyone of us are in fact capable of training other people to perform functions that we are competent in. Training each other is one thing, improving on what we have learned from each other is how we excel.

Studies have shown that 82% of employees to be the most effective training methods. This is because there is already a trust relationship between those doing the training and those receiving the training. There is little doubt that those people who do the work are best equipped to teach people how to perform their functions. But that does not mean that the trainer is receptive to learning from their peers how to do their functions more effectively.

The key lies here in encouraging a free flow of skills transfer and then rewarding and recognising those who have gone through the process. This is done by way of Intraternships ™. Intraternships are a system of internal internships that teaches the trainer to invite innovations from those who are being trained, capturing those innovations and then changing workforce behaviour by adopting those innovations. An Intraternship does not replace formal training it merely reinforces practices within an organisation that could be bolstered by further training. Each person that undergoes this training is then recognised with an Intraternship certificate at the end of the 6-12 month period of learning. The certificate tells the world that not only is the employee skilled in their job but has demonstrated the necessary capability to adapt to the evolving workplace. This is all done at a fraction of the cost of conventional training.

Go to Rise Training to find out more

How much does a level 8 BEE certificate actually cost? PPRA content (Estate Agency dilemma)

Last week we demonstrated that if your turnover is between R2.5m and R35m and you have 51% black ownership then you all you need to do is sign an affidavit that shows that you have requisite ownership and you have a level 2 (100% ownership is a level 1, again with an affidavit).  This is more than acceptable to the PPRA.  PPRA’s legal manager and acting transformation manager, Deli Nkambule, explained that “the PPRA’s position is that it will not issue an FFC unless a compliant BEE certificate accompanies the application.

“The accepted level of compliance is 40 points or more (BEE Level 8). You will not be issued a BEE certificate if you score below 40 (making your BEE certificate non-compliant),” she said.

The reported quote shows a complete lack of understanding of the technical and financial considerations that are required just to get to a level 8.  We’ll discuss this in the next email. 

A BEE scorecard is made up 5 elements.   We’re only going to focus on those points that have a financial consideration to them.  The table below makes a few assumptions

• The cost of labour in a smaller estate agency is 60% of turnover. This is based on the 50/50 revenue split between the agent and the agency.  We’ve added on a further 10% for support staff
• The Net Profit After Tax (NPAT) in the last financial year is 5.62% of turnover. This figure comes from StatsSA.
• The estate agency’s revenue in this example was R10million in the last financial year.

The three elements that require a financial outlay are

1. Skills development (spend only on black people) – 3% of payroll (if the agency does not employ any black people then this will have to be spent on training of black people outside of the organisation)
2. Enterprise and supplier development (assisting black owned businesses to become sustainable) is 1% of NPAT each

• Socio-economic development (financial contributions to charities where the beneficiaries are at least 75% black) is a further 1% of NPAT

We have then added on a further R15,000 for the actual BEE certificate to be issued.

Turnover/Revenue	R10 000 000.00
NPAT	R536 000.00
Payroll	R6 000 000.00
Skills development spend on black people	R180 000.00
Supplier Development	R5 360.00
Enterprise Development	R5 360.00
Socio Economic Development	R5 360.00
Verification costs	R15 000.00
TOTAL	R211 080.00

This is an annual cost of compliance and the costs increase as the turnover increases. 

Next week we’ll show you that even if you do spend this money there is no guarantee that you will arrive at a level 8.

If you would like to know more about level 2 BEE compliance that will cost you a quarter of that amount take a look here.

Staff tenure in South Africa and institutional memory. Emulation and Innovation

Career Junction recently reported that staff retention in an organisation depends on the age of that person. It noted that baby boomers (age 58 to 77) tend to stay in a job for seven years. The length of time in a job tends to decrease in age groups with the most productive age group between 28 to 42 staying in a job for only 2 and half years on average. The report also notes that executive and senior managers stay in their position for four years.

This job fluidity has a huge impact on institutional memory. A corporate entity whether that be private or public relies on a consist level of stability in performance to run optimally. The best way ensuring this level of service is to retain the institutional memory in an organisation. Training plays a vital role in this process. Sending people on courses related to their jobs is an important component of this, but it doesn’t do much to retain corporate memory.

In our experience the most effective method of ensuring corporate continuity is through a series of internal internships, known as INTRATERNSHIPS. These Intraternships encourage staff to exchange information through a series of seminars. They go much deeper than that, the trainers are encouraged to pass on information and receive information that might lead to innovations that could lead to operational efficiencies resulting in streamlining the business.

Trainers are taught to deliver these seminars to both their co-workers and executive and senior managers. Each person on this programme is regarded as an intern. After 12 months of seminars and idea sharing each person, irrespective of position in the company receives a certificate of INTRATERNSHIP. This certificate becomes a negotiation tool for promotion or for future employment.

Over the next few months will breakdown each concept in detail.

Estate agents, licences and BEE scorecards. They want a level 8, let's give them a level 2

Before I launch into why this is a travesty and an application of extremely arbitrary flexing of authority that is not backed by anything related to legislation, I will say the following, in a large font

THE PPRA WANT A LEVEL 8.  WE ARE GOING TO GIVE THEM A LEVEL 2.  YOU STILL RETAIN CONTROL OF YOUR BUSINESS AND THE BEE CODES HAVE NO PROBLEM WITH IT.  MOST IMPORTANTLY THERE ARE NO TAX IMPLICATIONS.  GO TO AANDELE, FILL IN THE FORMS AND WE'LL SORT IT OUT

I agree with Piet le Roux who told Stephen Grootes (who strangely enough was an awful interviewer in this instance) that the BEE requirement for a Fidelity Fund Certificate is a level 8 and that this was wholly unconstitutional and arbitrary.  Piet argues that legal manager and acting transformation manager at the PPRA, Deli Nkambule may want a level 8 now but what's stopping them from asking for a level 7 the year after.

I was messaging Piet at the same time telling him that getting to a level 8 is a very expensive process.  If you haven't got ownership then you'll need skills, ED, SD and SED and you'd better hope that your procurement is OK.  Rudolf and I have just come back from a large QSE that needs a level 8 and they don't get to the level 7 to drop to a level 8. 

What grates me is that both Ms Deli and her boss Thato Ramaili don't understand what it takes to be a level 8.  And I quote

“the PPRA’s position is that it will not issue an FFC unless a compliant BEE certificate accompanies the application. The accepted level of compliance is 40 points or more (BEE Level 8). You will not be issued a BEE certificate if you score below 40 (making your BEE certificate non-compliant).”

Getting to 40 points without ownership means you need 55 points.  And if your business is 51% black owned and you turnover less than R50m then it's an affidavit, not cost and you're a level 2.

I come back to what I said.  This is a game.  You want a solution that gets you to a level 2, costs you a fraction of what it would cost to get to a level 8 and you keep control. I have one - you call now.  It's a game, the rules are never consistent but we are.

Black ownership within 3 weeks, no interference only compliance

This is a repost.  There has been a problem with Feedblitz that has miraculously been solved.

The upshot is

1. BEE ownership in three weeks
2. Fully compliant with the codes (see below)
3. No shareholder interference
4. No Capital Gains Tax
5. If it needs to go through a verification (this will take longer than three weeks) you will get full recognition for ownership
6. Contact us to learn more

I am not the first to think about the concept of options or warrants. I won't tell you who did it first because theirs is too simplistic; focusing on white owned businesses and only QSEs or EMEs. I was talking to my old friend Rudolf Rautenbach who told me about Ownershield. Rudolf is a little cleverer than most in this industry. We lost Gerhardus Burger to Australia, Chris van Wyk to Mauritius and Kevin Lester to Anglo. These were three of the brightest minds in the BEE business. Rudolf has stepped up and filled the weighty shoes that Mr Burger filled by becoming THE BEE tax expert in South Africa. Part of Rudolf's experience lies in capital gains tax. This is a bugger because if you do an ownership transaction, uncle fascist SARS is going to want its undeserved piece of the pie in the form of CGT.

This is a problem and quite possibly a major deterrent to companies having to undergo a BEE transaction. This does somewhat highlight the punitive nature of the entire BEE system. I would tell the potential partner that they must pay the CGT otherwise no deal. I digress.

Rudolf says that options are a viable vehicle for BEE ownership not only because it doesn't attract CGT. He lists a few benefits

1. It's a top up method. If you have say 25% you could top it with 26% of options and you'll get your level two as an EME or QSE
2. It's a good option for larger companies as well. If this programme exists in the codes then it will pass a verification
3. It can be used by all companies.  The structures may differ slightly but it's widely applicable

I have selected the reference to options and warrants from the Financial Sector Code (the only code that was properly negotiated and drafted) , but the words are exactly the same in the generic codes.

8    OPTIONS AND SHARE WARRANTS

8.1    Exercisable voting rights and economic interest will be recognised where a participant holds an instrument granting the holder the right to acquire an equity instrument or part thereof at a future date, if the following requirements are met:

8.2    The exercisable voting rights attached to that instrument are irrevocably transferred to the holder for the option period and are exercisable by the holder before acquiring the equity instrument.

8.3    The value of any economic interest is irrevocably transferred for the option period and paid to the holder of that instrument before the exercise of that right.

8.4    The value of an instrument must be determined by using a standard valuation method for calculating the net value.

This is where Ownershield appears to be different to other companies. Most target white -owned business that turnover less than R50m. However Ownershield looks at it from the perspective of a prospective black shareholder as well. What if the prospective shareholder (who is black but I'm not going to repeat this) agrees to take an option for 36 months. They get the benefits of ownership because of the voting rights and dividends. They may be able to store up enough money because of that dividend flow to exercise the option when it matures. And they are gaining experience of ownership. Hell there may even be executive employment opportunities. We could call this a long date – where the two parties go out with each other and then decide to marry. As opposed to an arranged marriage at the outset (which is bound to fail).

Having noted that. The option route is still good for white owned companies. There are failsafe mechanisms in the structure that will protect all parties. We can't pretend that that ownership is easy. It's not. It's a hard slog. Different cultures and different expectations get in the way. There's one example of an English speaking white South African working in a very Afrikaans environment in some dorp somewhere and he can't fit in, it's a very poor cultural fit AND THEY ARE ALL WHITE. Also if either party decides this isn't working, cancel the option agreement. Everyone walks away.

I'm not a big believer in the ethical nature of BEE nor do I believe in the spirit of it, mostly because the government's bona fides is not genuine and they have messed it all up. But for some reason I think the option erm.... option is probably the closest to the spirit of these draconian codes.

This is a solution for all businesses, even CCs. Doesn't matter how big or small you are and doesn't' involve preferential shares and a dodgy law firm in Bloem. And the turn around time is quick there's no CIPRO or the master of the high court. None of that. Yes there are a number of documents and agreements that need to be signed, there's also compliance with the Companies Act. Rudolf has got all that sorted. In fact if you don't want to manage it at all, he'll doo that for you too.

You can contact Rudolf here. Hell if I'm nice to him he might include me in the meeting.

COFI and its BEE requirements will likely take time to implement

This is the CONDUCT OF FINANCIAL INSTITUTIONS BILL.  It wasn't something I was aware of until I was approached by Ruan Jooste, the editor of Citywire to write this article.  I thoroughly enjoyed writing it too.

The gist of the article is that the FCSA is going to impose BEE requirements on licensees at some stage.  This will happen after the Bill is assented to and a draft code of good practice is sent out for comment.  I base this on ICASA's requirement for ownership and BEE performance in order to retain a licence.  However ICASA has always had ownership requirements, insurance licences have never.  I expect litigation.  But - if you don't know what to do then you can contact us and we'll guide you through it. 

It's a good idea to register with Citywire to read this

Much has been written about the Conduct of Financial Institutions Bill (Cofi) on Citywire South Africa. Published in 2018, the bill has been languishing in the comment pile for the last six years. However, the Financial Sector Conduct Authority (FSCA) thinks that the bill will be sent to parliament this year, according to Citywire’s March report.

Among its many objectives, Cofi intends to ‘promote financial inclusion’ and ‘promote transformation of the financial sector’.

However, the bill itself is vague as to how this transformation will be achieved – possibly by design. A type of code of good practice will likely be issued at a later stage mandating the FSCA to monitor and enforce compliance.

The bill itself doesn’t seem to understand the concept of black economic empowerment compliance. Compliance is expressly dealt with in clause 38. 

If a financial institution is subject to requirements of the Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003) and the Financial Sector Code for Broad-Based Black Economic Empowerment issued in terms of section 9(1) of that Act, it must have a policy and plan in place to meet its stated commitments in terms of promoting the transformation of the financial sector in line with those requirements.

 

There are two distinct aspects to this clause.

The first is the term ‘subject to’. This is a difficult term to understand because it doesn’t specifically mean ‘legally obliged to’. The Britannica Dictionary explains that ‘subject to’ can have three possible meanings: ‘affected by or possibly affected by (something)’; ‘likely to do, have, or suffer from (something)’; or ‘dependent on something else to happen or be true’. None of which imply any legal obligation. My reading of this clause is that it implies some legal obligation that does not exist in law.

The second is that if a financial institution is subject to the specific code then it needs to have a policy to meet its stated commitments. 

Herein lies the deception.

Codes of good practice

The Black Economic Empowerment Act says that the Minister of Trade and Industry and Competition (DTIC) may gazette a BEE code of good practice under section 9 of the Act which is exactly that – a code of good practice. In other words, should an institution wish to comply with a code then it would need to look at the targets contained in that code of good practice.

 

 

The only entities that are measurable under the codes are organs of state and public entities. All privately owned entities comply with BEE codes voluntarily. This is because BEE codes are fundamentally unconstitutional and if compliance was enforced they would be thrown out by the Constitutional Court.

Treasury itself in its Explanatory Policy Paper accompanying the Conduct of Financial Institutions (Cofi) Bill incorrectly writes that ‘The Broad-Based Black Economic Empowerment (BBBEE) Amendment Act was introduced in 2013 and provided for Generic Codes as binding requirements on companies’.

The only method of enforcing compliance with a BEE code of good practice that exists outside the allocation of mining licences is that of the allocation of licences or concessions. This is covered in section 10 of the BEE Act. I’ve seen applications for this requirement in Public Private Partnerships and the issuing of licences by the Independent Communications Authority of South Africa (Icasa).

The Icasa notice here (prescribing regulations for limitation of control and equity ownership by historically disadvantaged groups) is probably a fair indication of what the FSCA will do once the Cofi Bill has been promulgated. A type of code of good practice will be published for comment; in the case of BEE regulations the comment period is 60 days. Then the comments are considered (it’s doubtful whether any contrary comments are ever considered) and the code is finally gazetted.

We’ve waited years in some cases for the final code to be gazetted. The draft code will set out the empowerment requirements, which will probably be staggered over some time. The Icasa regulations require a 30% black ownership target to be achieved in 36 months from the date of gazetting and then set certain BEE levels over that same period. 

There are challenges for the legislators. Empowerment criteria have never been a requirement for a licence to conduct financial services or a financial services-related business. The Icasa regulations have had empowerment criteria attached to licences for the last 20-odd years.

The migration to the new criteria is likely to be complicated and not without a fair amount of litigation.

South African businesses are becoming more litigious against badly thought out legislation and the FSCA would be foolish to expose itself to court challenges that it ultimately cannot defend.

Where do advisers stand?

The Cofi Bill remains a bill [for now], during an election year where it’s believed that there will not be a single majority party voted into power. Legislating is bound to be more complicated and perhaps lengthy. Once the bill is enacted then the Cofi Code of Good Practice would need to be submitted for comments and those comments considered.

When the code is gazetted, which could take upwards of a year, there would probably be a lead time of three to four years.

Using basic mathematics I would suggest that nothing will happen for at least 18 months after gazetting. We might see something happening in 2026 or 2027 and then there will be a lead time to meet that level 4 requirement that the FSCA talks about in its draft paper.

Three years is a very long time in the world of empowerment legislation.

 

 

Cyril wants more ESOPs and slaptjips is useless

That's unfair.  They are both extremely useless.  On another level.  cyril has been the biggest disappointment since Kamp Staaldraad.  He's a clueless idiot.  An indecisive moron.  When he opens his mouth we take it with a pinch of salt (something that the anc hasn't figured out how to steal yet).

Off cyril goes to some event organised by slaptjips (ebrahim patel - more useless than cyril).  Sprouting some outdated leftist (the speech was probably written by tjips) our esteemed weak man said

He said if workers were incentivised, as was the case with CEOs and other top managers, they would go above and beyond in their bid to see the companies they worked for grow.

Ramaphosa said worker share ownership schemes were an "investment towards the achievement of greater social justice", adding there is a need to "underpin what we do with the concept of leaving no one behind".

"These interventions are necessary for the sake of equal opportunity and addressing the historical inequities and inequalities, particularly in a country like ours, but also towards increasing productivity and the growth of the economy."

He added that quite often, workers were sidelines (sic) when companies reward their top CEOs or managers with shares in a bid to incentivise them and encourage them to be more creative, adding:

"And yet the workers are the real engineers of getting growth in a company because once they are well incentivised, they themselves will walk through brick walls to ensure that there is more growth."

There are some serious problems with this drivel.  We have to remember that this is electioneering.  I need to explain why this is utter rubbish

1. The most suitable vehicle for Employee Share Ownership Plans (ESOPs) is a trust.  A trust can accommodate an unlimited number of people.  It's also quite flexible, people can come in and out of it.  A company ((Pty) Ltd) can have a maximum of 50 shareholders.  If  an employee is fired then they remain a shareholder.  Messy.  But you may have noticed that another of cyril's governmental failures is the master of the high court.  Dysfunctional is too polite a term. You  could wait for up to two years to get these incompetents to give you a Letter of Authority.   Let's face it.  ESOPs are done because of BEE. There's no other reason. If you do it then you want the points.  But in spite of the substance over legal form rule, no VA is going to give you the points without a a LOA.  And why? Because the power hungry deludeds at SANAS will give them a non-conformance and take away the VA's licence.
2. The overwhelming, and I am talking OVERWHELMING, minority of BEE deals are paid for upfront.  Another major failure of the BEE process.  Every other deal, including ESOPs, are vendor financed.  The workers are not going to be incentivised to perform for at least 10 years, probably more, because their ESOP owes the company money.  The workers may be able to behave like shareholders in their ESOP but they are still not behaving as shareholders in the company.
3. cyril's gone populist.  When he speaks of CEOs and managers getting shares he is referring to share options.  These mature in a much shorter period of time.  If the company performs then the strike price of the option is less than the share is worth at the time.  Hence you make money.  But this depends on whether the shares are tradable.  Listed shares are easier.  Private shares are harder.

Conclusion.  Don't vote for the anc.  Don't vote for the eff or mk.  Just vote sensibly