It was supposed to be a great moment in the history of empowerment, a milestone that was some seven years overdue. Alas they have done nothing but disappoint.
The venerated BEE council met last week, chaired by Rob. And all that came out of it was some babbling about fronting. Of all the articles written about this doleful topic, the best came from Kim Cloete who writes for Moneyweb. She writes
Minister of Trade and Industry Rob Davies, has charged that 75% of companies in the private sector are still not fully compliant with BEE, especially in the areas of enterprise and skills development. And he's particularly worried about "fronting", often used to acquire business from government departments and municipalities.
This is so safe. There are real issues with BEE that do involve a variety of things ranging from the skills deficit to the useless SETAs through to too few 100% black owned businesses. Think about it, so many companies struggle to find decent learnership programmes because their governing SETAs don't offer courses that they actually need and don't offer any constructive help in overcoming their problems (W&RSETA is a prime example).
And Rob chooses to talk about FRONTING.
What about the impact of the new companies act and King III (and numerous other acts) that provide really good reasons not to bring on more directors. These are real challenges.
And Rob chooses to talk about FRONTING!
I think I know why he's talking about this - let's go back to Kim (quoting Jenny Cargill, who is referring to government business)
"Ownership punches above its weight. You don't get in the door if you don't do black shareholding,"
She's right (here is my about face) - Rob really has no choice because Treasury (and rightly so in my book) is reluctant to move away from the current procurement regime. Hence if Rob wants to make a point that goes across all procurement within the country he has to focus on ownership.
In spite of this, and my sympathies are with Rob, the inept BEE Council is not looking at the real issues that South African businesses face. I don't believe they have the balls or the desire to do so. And fronting allows them to play the RACE CARD (which must be used in all circumstances.)
So we wait with bated breath for the next meeting to bark wildly away at more issues of FRONTING.
On the subject of SETA's I see that Blade has
recently signed a performance agreement with Mr Zuma to ensure SA produces 10000 artisans a year by 2014.
Good luck Lem, let us know how we can help you with this.
(If this post seems to be a lot like the Lefsetz Letter it is being done on purpose).
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