The overall aim of Top Empowerment Companies (TEC) is to objectively measure the contributions made to broad-based black economic empowerment (BEE) by companies listed on the JSE. This provides insight and a view on the status of empowerment within large SA businesses.
A full and thorough application of the broad-based BEE Codes of Good Practice is the basis for the scores generated, with companies being invited to submit relevant information to enable Empowerdex to calculate their scores. Where there are no submissions made, publicly available information - which includes annual reports, sustainability reports, websites, Sens announcements and other documents - is used to derive scores.
Companies are ranked on all the elements of the broad-based BEE scorecard - ownership, management control, employment equity, skills development, preferential procurement, enterprise development and socioeconomic development - as well as on their overall scores. Below is a brief description of each of the elements and how they are analysed by Empowerdex.
Ownership
The ownership rights that are in the hands of black individuals, black women, black designated groups (youth, unemployed and rural dwellers), broad-based schemes, black new entrants, employee schemes and co-operatives are taken into consideration here. This is subject to the strict maxim of "substance over legal form" which pervades the codes. For example, if preference shares that are similar in nature to debt issues by a company are issued to black investors, these would not be taken as part of black ownership.
Management control
Here the top management structure of the measured entity is tested for black participation, using the adjusted recognition for gender to provide enhanced recognition to companies that position black women in such roles. Points are scored for representation at board level, in the top executive structure (usually CEO, CFO, and so on) and also at senior top management and other top management levels. Typically, these management levels would include members of the executive committee and heads of business units or subsidiaries.
Employment equity
Black representation at senior, middle and junior management levels is tested under this element. This excludes those recognised under the management control element. In addition, participation in the workforce of the measured entity by black disabled people is also tested. Representation is adjusted for gender under this element.
Skills development
Skills development contributions for the benefit of black people are scored here. This takes into account the type of training outcomes and methods of assessment in the learning programmes matrix as presented in the codes. Measured entities are scored for their overall skills development contributions, adjusted for gender, their contributions in favour of black disabled people, also adjusted for gender and the participation of black employees in categories B, C and D learning programmes or learnerships, also on a gender-adjusted basis. Such learning programmes are typically on-the-job training with a formally assessed outcome or qualification.
Preferential procurement
This element assesses the financial impact on broad-based BEE compliant firms through business with the measured entity. Total procurement from compliant entities, procurement from compliant small businesses and procurement from black-owned and black women-owned enterprises are analysed. This allows firms to score under more than one indicator for this element and provides an incentive to procure goods and services from small black-owned businesses.
Enterprise development
This element determines the impact of a measured entity on the development of black-owned business through monetary or quantifiable non-monetary support. Common forms of support include interest-free loans, management skills transfer and the provision of preferential credit facilities.
Socioeconomic development
This looks at the social impact on black beneficiaries. This differs slightly from standard corporate social investment (CSI) in that it is largely directed at infrastructural, educational, community and health-care development.
Given that all of the scores are not verified by means of perusal of official company documentation by the Empowerdex research team, we would caution readers to interpret the results as being indicative, rather than definitive, of the achievements of the companies. In addition, no points were allocated for those indicators where no information, or inconclusive information, was available. Thus, due to the occasional lack of company information that is detailed enough to derive scores, the scores presented in this publication may be lower than the actual scores that a company deserves.
Nevertheless, a large number of the scores are derived from actual verification certificates supplied to Empowerdex by the companies concerned. These scores were taken to be accurate by the Empowerdex research team.
