Ownersheepish

Bless me for it has been a while.  I discovered that if you get twittering your blogging suffers - something my fellow blogger Melissa Chang told me is a very normal process.   It's been a very interesting month - I went on a national tour talking to both the private and public sectors about the PPPFA regulations.  I was quoted in Business Day - something I have been wanting since I started this BEE lark five years ago and I appeared on TV.   Now before my head gets too big..........

I found this article on my alerts "BEE firms could warm up to family businesses" that initially got up my nose (I've changed tack since I started writing this post).  It's written by Cynthia Mapaure who is the financial director of the Mineworkers Investment Company and in it she avers

Family businesses employ millions of black workers yet black economic empowerment (BEE) has made only limited inroads within these companies - leading to impatience in some quarters over the slow pace of change at the core of our economy.

OK - I don't agree with this statement.  I firmly believe that family businesses should be allowed to remain exactly that FAMILY BUSINESSES.  Why on earth should they sell out to a BEE investor or any investor for that matter. 

But Cynthia goes one step further, surprising me very pleasantly.

Why would a family business that had stalled on BEE for years suddenly have a change of heart in the middle of a downturn? Chances are the company is in dire need of capital and is embracing a new partner out of necessity.

She backs this up with

Some empowerment companies still have relatively strong balance sheets and solid capital reserves. They might benefit from value opportunities like this.

Is she perhaps suggesting that empowerment companies might actually be willing to part with money for their shares - something VERY few have been interested in doing up until now.

Her concluding remarks are

If you are serious about your empowerment mission, there can be no shirking the responsibility of extending transformation to the workers who depend on these businesses for jobs and a regular income.

And this is where I draw a line.  We know where Cynthia is coming from - the byline tells us that she is the financial director of the Mineworkers Investment Company, a leading BEE company with a 14-year track record.  She does deals.  But surely someone who knows anything about deals knows that there is a scorecard that looks after the transformation of the workers.

I put it to you Cynthia - can you seriously prove that by extending the ownership of a private company to the workers you are benefiting them in any real way?  Let me tell you what I think

1. The shares ain't worth shit unless someone is going to buy them.  And in a private company situation this is not going to happen readily
2. I have yet to be convinced that ownership in a company where the shares are not readily for sale actually improves staff retention

Come now Cynthia - drop the ownership rubbish and start talking about job creation and entrepreneurship.  Focus on skills development and whilst you are at it talk to the SETAs about innovative ways to develop skills.  And then why not invest some of your own money in starting black owned family businesses that will compete healthily with white owned businesses.  Leave the ownership of family businesses alone - they are the cornerstone of our economy.

Comments

[Henry Caines]

After reading the article, I would have thought she was proposing corporate/ profit sharing, which my dear friend is actually more popular in the Western world for consultancies. In American corporate world you actually have employees being offered Associateships... Here Sir you were more on an emotional rant than throwing valid good points of reason.

[Paul]

Hells bells mate. Whilst I appreciate your reading my blog, I have no idea what you are saying.

Paul

[Henry Haines]

1.Article - I put it to you Cynthia - can you seriously prove that by extending the ownership of a private company to the workers you are benefiting them in any real way?

Response== Please refer to the American model of offering associateship to employees in an organisation..

2. Article - The shares ain't worth shit unless someone is going to buy them. And in a private company situation this is not going to happen readily

Response== the shares are worth something if they are offered to employees who now have to work extra hard to put value to them and enjoy the annual dividends, read profit-sharing

3. Article - I have yet to be convinced that ownership in a company where the shares are not readily for sale actually improves staff retention

Response - Please again refer to the American fellowships/associateships in small to medium companies. They have worked.

Conclusion

You article was meant as a critic on her proposals. Her article has more fundamental flaws which you did not raise except outrage at the issue of effecting BEE deals.

I agree with you that given her background as an investor/deal-maker, she is bound to make ludicrious assertions just to induce deal-making.. For her it means more commissions

The bottomline is that the government must induce the black folks to create their own family owned and run companies. To achieve this, it must use venture-capital companies as a vehicle for this. Blacks buying into other family owned businesses is not genuine growth or expansion....

My apologies for contributing on your blog.