Paul Janisch

BEE seminars and workshops

I gave my first seminar in 2005.  To the best of my knowledge it was the first one that didn't focus on ownership, but on everything else that you could do to build up a BEE profile.  Those were the early days of broad-based empowerment and almost every company was convinced that they would have to close down if they didn't conclude the obligatory deal.  The seminar I wrote dispelled those myths.

I've been concentrating a lot on consulting over the last couple of years and haven't done much on the workshop side.  I hosted one last week through Abelusi and it was fantastic.   I was really fortunate with the delegates, they were all very well informed.  I'd forgotten how much I enjoyed it.   And so to the point of this post.

I am hosting an afternoon seminar with the Learning Café on the 22nd of April in Johannesburg.  I wrote this piece which explains what I will be talking about.

A popular misconception that tends to be associated with black economic empowerment is that it is an expense.  In other words it is a tax and an unofficial one at that.  I’m not going to say that this couldn’t be further from the truth because it certainly is the case in most companies in South Africa.  The problem that these companies will face in the long term is that of sustainability.  Any programme worth its salt needs to provide tangible benefits to all parties concerned, a failure to do so will result in one of the parties losing interest.

Therefore you have to ask the question:  What do I get if I implement BEE within my organisation?  And this has to be the starting point.  More often than not many companies have already started implementing processes and procedures because they make perfect business sense that may be regarded as BEE initiatives.  And by implication they have started populating their scorecard. 

The problem facing almost every company is that they only ever hear about the more glamorous (and sometimes contentious) aspects of BEE, like the Sasol BEE deal or how the same people have now moved from being stupendously wealthy to being ridiculously well-off.  There is so much more to broad-based BEE than this, it is a simple process of understanding the requirements and exploring the nuances of each element so that they will fit in with your specific organisation’s business plans.

Paul Janisch’s Learning Café talk will cover these nuances and give you practical examples that show you where the BEE business opportunities and efficiencies might lie within your organisation.

If you would like to attend you can contact Hilda Deavall on (011) 452-7928.

I am also starting to do more seminars through Jacques Roux and the Abelusi Training Network.   Many of you might know Jacques through the fantastic work he did with EES-Siyakha.  Jacques has left EES and has started Abelusi.  Abelusi is going great guns and is really making an impact in the market place.   Jacques is also happy to arrange corporate BEE workshops, so if your company (other than SASOL - their BEE deal is just plain fantastic) requires an updated and customised BEE course please contact Jacques on (016) 986-3888 and I'll come do it.

And one more thing
A certain lawyer's letter alleges that Caird and me (being Paul Janisch) are trade connections of EES-Siykha.  I am in no way associated with that company and I never will be, I don't like companies that send me unwarranted lawyers' letters.

SkweyiyaED

Financial Mail - March 21 2008
There are a few interesting articles in the latest FM.  There are two articles in the FM relating to welfare. 

• An update on SA's welfare system. 

The first one offers the latest statistics regarding South Africa and welfare.

i)    12.4 million South Africans receive income grants (quarter of the population)
ii)    Government will spend ZAR105billion on welfare this year (4.5% of GDP)
iii) There were fewer than 6 million South Africans on welfare in 2003
iv)    Welfare payments make up 20% of the budget.

The growth in welfare payments is concerning, especially the rate at which the beneficiaries are increasing.  This concern is based on the fact that human nature is such that if you provide handouts then people tend to rely on those handouts as opposed to seeking employment.   You can read the  rest of the  article.

• The pragmatic Mr Skweyiya (who apparently is liked by the new Zuma camp, and should not be culled in the next cabinet)

A feature on Zola Skweyiya, minister of social development, describes him as pragmatic: to him security and nutrition for children must come first, followed by other measures to bring the unemployed into the labour market.

This sentiment is in keeping with the requirements for socio-economic development; viz.

3.2.1 Socio-Economic Development Contributions consist of monetary or non-monetary contributions actually initiated and implemented in favour of beneficiaries with the specific objective of facilitating sustainable access to the economy for those beneficiaries.

BUT - before you start fretting about your SED contributions.  Skweyiya states that rural children are the worst off of all groups

"They should be the focus of the state's attention.  There is a lack of food and water, and the schools are in a terrible state. Our clinics leave much to be desired. I would love that all children had a roof over their heads and were able to have two meals a day, and, most of all, that they were secure. We are trying to see to that but it is a tough task to fulfil."

Skweyiya's vision is to establish an early childhood development centre, or creche, in every village and poor neighbourhood throughout the country. The centre would be a place where children received pre school education, which most poor children miss out on, as well as two meals a day, in an environment that was safe and secure.

These centres/creches have a softer angle to them.  They are not patent initiatives that facilitate access to the economy but they lay the groundwork that will see these people standing a better chance of entering the economy.  This is what Mel Lewis is doing with the South African Breastmilk Reserve.

Similarly Philimpilo Community Care is a cause that looks at reducing the absentee of  HIV positive people.   Their mission is simply

To reduce absenteeism by keeping the breadwinner in the workplace, productive and focused, by ensuring his / her family is educated and receiving holistic care with regards to HIV/Aids

This is a method of facilitating sustainable access to the economy.  And by increasing the number of days each person works it improves the productivity of the country and reduces the load on the state's welfare system.   The person running the project is Julie Peters.

Going back to Skweyiya's creches.  Surely these are a potential public private partnership.  I'm sure that if a company like Discovery got involved it would achieve many of its own FSC and other goals.  Marisa - let's look into this.

Oh and finally

You may have heard that the BEE Advisory Council was finally going to be constituted.  The FM writes that there are doubts that it will be constituted within the next five months.  The problem lies in the ANC transition next year.  The council would probably be reconstituted once the next power regime enters.

It can't be easy being an ex-influential-person-in-the-ANC, except of course if you are Ngcuka  (I include this last link because I was quoted again in the Business Times two weeks ago, I'm starting to enjoy this fame)

 

In-SANAS-ity - or a reader writes

Anyone who has ever blogged will understand the joy of receiving comments and emails based on your latest post.  I have about 50 subscribers but I do know that every now and then my posts get circulated - especially when I talk about my soon to be new friend jungle jim (who seems to be active again,  I've missed him).   

I got an email from someone (I'm going to call him Albert) who has an incredible insight into the ABVA/SANAS relationship. I didn't get Kevin's last response, to me the behaviour of ABVA was its own issue and problem.  However it seems as though SANAS has made certain demands on ABVA that might impact on the behaviour of ABVA's various members.  You decide:

"There is no doubt that SANAS is involved somewhere. They are on a power trip second to none. As I hear from the people who applied for accreditation, and some of them have had as many as four inspections to date and some have spent in excess of R100 000 on the process (this does not include development costs for systems, only fees paid to date!), SANAS nitpicks and require a system which has a higher standard than that required of Chartered Accountants.

There is no doubt in my mind that the so called 'Guides' owe their existence to the over zealous and hidebound slavery to rules and ISO systems according to which SANAS want to bind everyone ( Remember their only experience to date has been the accreditation of Laboratories where ISO works well). Some of their requirements for the Verification industry are simply ludicrous and will not withstand examination. It seems that they dream up new rules and committees every night.  I think it is a case of -'I like blue and therefor everyone should wear blue and be damned with the rest, I say do it!' The gods have spoken. They are clearly operating to a set of rules which they really do not have the authority to set. ABVA and its members either no not have the guts or will to stand up to them because they are afraid of not gaining Accreditation or the do not have the ability or authority as an association to say -'Enough is enough"- and take on SANAS with reasonable arguments.

I agree that going for Bernard will serve no one. He was clearly sacrificed by his friends. If he is guilty, and I don't think that he is, it is probably because he may have disseminated the 'guides', and thereby done all of us a favor.

A little bird tells me that quite a substantial number of the so called 'Full Members' of ABVA may not in fact have paid there dues for the current year. One wonders if they are then still in fact members or if their membership on record is kept in place simply to allow ABVA to claim a representative role. Is it not time for a new Broad Based Association to come into existence and really represent the industry in its widest sense? They can then speak for the Verification Agencies /and/ the Consultants (perhaps with one Board and two chambers to ensure that everyone works towards the same ideals and some synergy will be seen. This will certainly serve all."

Albert also sent me this document - which is a later version of the October document I posted last time.  It still has cwu as the author.   Albert  writes

For your information I attach a copy of another version of the fateful 'Guide for Verification Agencies' which no-one wants to own up to.This one is dated 30 November 2007. It is also circulating in the Verification industry and at one time seems to have been accepted as the latest 'Word From Above' by some. It is clearly a later version of the 'October Guide' and may even have the same author. According to the 'Copyright Policy' on page 2 it clearly purports to belong to the dti who have now disavowed it.

Thanks Albert - I know that Kevin was very keen to read your comments.

ABVAndalism

Has the battle been won, and if so where is the war going to take us to?  Stephen Timm wrote an article in Business Report last week telling us that "Abva was 'wrong' in insisting that business owners who supply corporates must have a verified agency rating."   Thanks to everyone who sent me an email about this article.

But I don't think we should leave it at that.  ABVA's management and leadership have behaved shockingly under the circumstances.  They have hurriedly published a response to Timm's article in today's Business Report (thanks Colin).  In this response they maintain their innocence as an association.

I want to talk about a few things in this last report - and it probably is best to go back chronologically.

1. The controversial draft document that started this mess reveals some very interesting information.  I was chatting to a colleague who pointed out that the document's properties reveal the author to be "cwu".  I noticed this but thought it might be some institution.   But closer inspection suggests that this might be C Wu, more specifically Chia-Chao Wu.  Is it that Chia-Chao wrote a document that the DTI were to regard as policy?  If this is the case then it is not even vaguely surprising that self-verification would be banned because an Empowerdex director has written the document.  This is in stark contrast with the sentiment  Vuyo Jack expressed in his book - (w)hen the dti task team [who put the codes together] addressed any issue about verification agencies and the verification process, Empowerdex removed itself from the process in acknowledgment of the conflict of interest. broad-based BEE - The Complete Guide page 78.
2. When I read the email from BEE Rating Solutions I emailed Bernard van der Walt immediately telling him I was going to go for him in this blog.  He responded with this email.  There is a bit of information missing from the mail itself, but it does suggest that Bernard asked a few people from ABVA in late February whether he could sent out this notice.  And Theo Lombard responded that it was acceptable.  Now take a look at Timm's article again.  In it he writes that "yesterday Lombard claimed not to have seen the [BEE Rating Solutions']e-mail".  When you read this with the ABVA response (written by Ridwana Jooma-Cook) you'll see more anomalies, specifically the e-mail sent by an Abva member in this regard was against departmental guidelines issued in October and was drafted prior to the recent meeting with the department. Abva instructed the member on March 12 to refrain from sending out any further communication in this regard. 
3.  There is something wrong here.  It seems as though BEE Rating Solutions is being used as a Judasbok (I can't find a definition of this word but it is the animal that leads all the other animals into the execution chamber in an abattoir.  The Judasbok itself is not slaughtered).  If the email had been successful then ABVA wins, if not Bernard takes the rap alone.  I would expect a lot more from an association that I was involved with.

So we come back to where we were in February last year.  The only rule that applies to any form of verification is that the verification has  to be  backed up  by "suitable  evidence".   And  it is quite likely that companies  that choose to verify themselves are able to produce  "suitable evidence".  I don't expect verification agencies to end up getting less work because of this - companies will always want someone to do this for them.  But there really needs to be a shake-up within the executive of ABVA.   

Bring Vuyo back
Perhaps it is time to get Vuyo Jack back into the business.  He is highly respected and is regarded as a pioneer.  He also has the ear of both government and business.  On top of it he co-wrote the definitive guide to BEE.

Vuyo - would you consider an executive position at ABVA?  I also think we need to see people on that board who are within the industry but are not verification agencies.  Perhaps someone like Kevin Lester or Robin Woolley, I'll sit on this board if I am asked.

By the way
I gave Theo a chance to respond to emails I sent him and he hasn't yet (in fact he has not responded to a single email I have sent him in the last three years.   I somehow think he's not going to respond to any ever).

It's official - Bernie says it is

There is one rule about blogging that no one will ever tell you about - and that is shooting from the hip.  You can create an immense amount of trouble for yourself by shooting your mouth off unnecessarily.

Before I start - I see that the Property Charter has been gazetted under section 12.  It was gazetted on the 5th of October, 2007 and has now found its way onto the DTI's website.

I have had some time to think about this post - and I've spoken to Bernard van der Walt as well.  I told him I'd be nice.  Here goes

Today many of us received this email.

BEE Update:  Self Ratings not valid

Spending money on suppliers who did self-assessment to compile their BBBEE scorecard does not count as BEE procurement spend on your scorecard. (Don't know where that English did come from - Bloem?)

According to a trade and industry department guideline (issued October 2007), self-assessed scorecards will not be recognised seeing that self-assessed scoring does not provide sufficient proof of a supplier's BBBEE status (Mail & Guardian, 13 February 2008).

Make sure that your suppliers provide you with official BEE verification documentation that is valid. BEE Rating Solutions is a full member of ABVA (Association of BEE Verification Agencies) and can provide valid scorecards to you and your suppliers.  In addition, we undertake to issue your scorecard within 48 hours for an Exempt Micro Enterprise (EME) and within 5 working days for a Qualifying Small Enterprise (QSE) or Generic verification once all supporting evidence has been submitted.

For more information visit our website at http://www.beeratingsolutions.co.za/ or contact
Bernard van der Walt at
Mobile:  082 885 0991
Phone:  0861 111 233(BEE)
Fax:  086 500 2270
Email:  bernard@beeratingsolutions.co.za

Before I say that this is a lot of deceptive bullshit crammed into one email - I'll say this.

1. BEE Rating Solutions does not put a link to the article they refer to.  And this is a serious omission because the article does not state that self rating is unacceptable.
2. They fail to mention that this is still speculative - it is based on a document that the DTI published in October.  It seems as though this document remains a draft - it is incomplete in places.

Now back to the original article.  It was written by Barrie Terblanche who is a tireless campaigner for small businesses and their rights.  It is quite strange for Barrie to have taken the stance he has - he's almost lost the fight.  But he is very clear to point out that even though the document states "when an entity have recognised B-BBEE suppliers without sufficient verified proof (i.e. valid verification certificate), all such B-BBEE spend must be deducted from the calculated B-BBEE spend. For the avoidance of doubt, a supplier letter or a self-assessed scoring system does not represent sufficient proof of a supplier’s B-BBEE status. (Only B-BBEE suppliers with verification certificate are included in the calculation of B-BBEE spend)",  the DTI still doesn't  know what they want.   
When pressed on the issue,  (DTI) BEE official Takalani Tambane told the Mail & Guardian that a self-assessed score will be recognised if it is supported by evidence. A verification agency studying the supply chain of a company will have to find supporting evidence to back up the self-assessed scorecards of the company’s suppliers. 

This last paragraph is very significant - I have written about this before.  The codes are very clear that points will only be awarded if sufficient evidence is produced (statement 000, paragraph 2.6).  This doesn't matter who conducts the assessment. 

Admittedly this does place a larger burden of proof on a self-rated certificate but the verification document in no way precludes a company that assesses itself from producing this evidence on demand. 

Back to Bernard

BEE Rating Solutions did not send this email out without consulting the powers that be at ABVA.  And Theo himself said it was OK.  I do find this strange because after my call for Theo's resignation I was told that he is a very well respected person within the verification community.  But this is plain weird.  The email is factually incorrect because the document it is based on has no official backing and is not available on the DTI's website.  Therefore the words contained in the codes take precedence.  And they do not prescribe any type of verification.

I invite any reader to comment on this post - if I am speaking kak then correct me.  I'll publish it on this blog. 

The origins and the board

I started this blog because I found myself in a position where a business relationship that had been going rather well was summarily terminated.  I don't have the best knowledge of html and web design so I opted for a blog.  My inspiration for the blog came from Fred Wilson's blog.  Fred is a tech VC based in New York City and he is incredibly prolific.  Fred showed me that you could mix business and personal interests in a blog and I started out trying to do that.  I don't have the same posting ethic that Fred has, so I typically write about BEE-related issues, but I might throw in a few other things, like my family, music or myself into the mix on occasion.

I'll come back to Fred at the end of this post.

I come from a strong public relations background and learned from working with Lesley-Ann van Niftrik at Image Communications that PR is often more effective than advertising.  So I tend to go for press releases and I have been quite successful in the last few years.

Yesterday I achieved the zenith of my PR programme - I was quoted by the Business Times in their headline article Vodacom cuts off Ngcuka.  This is a result of a structured PR campaign that Lesley-Ann designed for me.

Thank you for allowing me this little indulgence - now back to Fred. 

Fred has been in the VC world for many years and has a very mature insight into all sorts of businesses, and he is not shy to share his experiences.  He posted this on what he looks for in board members - I think these principles are very applicable to the South African environment.

There are a few comments at the end of Fred's post - I recommend you read the original post and also subscribe to the blog.

Thoughts On Choosing Board Members

I am a professional board member. I've been sitting on boards for almost 20 years and I've seen a lot. I've seen some of the best board members in action and have tried to copy them. I've seen some of the worst board members in action and have tried hard to forget them.

Here are some thoughts on choosing board members. This advice is for everyone, but it's of particular use when you are a bigger company, maybe public, and need to fill your board with good people.

• Avoid "big names"  For the most part, they are useless.
• Select people who will attend each and every meeting, who will pay close attention to the business
• Select people who have an affinity for your business, who understand your challenges and your opportunities
• Avoid putting someone you can control on your board. In tough situations they will have a fiduciary duty to do what's right and you won't be able to control them when it matters most to you.
• Don't let conflicts get in the way of selecting the ideal board member. Conflicts will be disclosed and can be managed. Many times the people who will understand your business best are conflicted in some way. There are ways to deal with this problem.
• Make sure to have an experienced accountant/auditor on your board and have them run the audit committee. That is no place for amateurs.
• Make sure to have at least two or three CEOs of comparable companies on your board. Make sure they are on the comp committee. Compensation issues are best handled by people who understand the talent market.
• Select people who have the time to do the job right. Being a board member is a job. It's not a retirement perk. If someone cannot commit to attend each and every meeting and to spend at least several hours a week on your company, they are not the right choice.
• Select people who will get along with each other. The very best boards I am on are friendly social active groups. Serious business doesn't have to be stilted and formal. It can and should be fun.
• Above all else, look for great judgment and ethics.