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Stop fronting now to avoid being published in the public register as non-BEE compliant!

by , 22 March 2013
It's no wonder black economic empowerment is seen as such a nightmare by many businesses. You need to keep an employment equity file stuffed with documents as proof of your compliance, and to make matters worse, further changes to employment equity are expected in just a few weeks. Now, there's been a call to punish non-BEE compliant businesses as part of proposals for the B-BBEE Amendment Bill! Make sure your employment equity report gives an accurate idea of your business ownership to avoid being accused of fronting...

The Black Management Forum met on Wednesday, and announced that there should be consequences for companies that don't comply with black economic empowerment, says Fin24.
 
How will they be punished?
 
According to the forum's managing director Nicholas Maweni, these businesses should be published in a public register and have meaningful fines imposed on them.
 
And it's not just talk – these are proposals for the B-BBEE Amendment Bill, intended to discourage fronting.
 
So if you haven't already successfully implemented broad-based black economic empowerment in your company, best you do so.
 
One way to do so is to implement an employment equity plan in your company today
 
Employment equity is a vital part of Black Economic Empowerment.
 
So if you haven't already done so, it's vital for your company to implement an employment equity plan today.
 
Don't just do it to avoid being fined by the Department of Labour for non-compliance though, as this will prove your business is doing its bit to right the wrongs of the past, says FSP Business.
 
But that's not enough.
 
Make sure the ownership aspect of B-BBEE doesn't put you under the spotlight for non-compliance!
 
Ownership is a crucial aspect of Broad-Based Black Economic Empowerment.
 
So much so that if your percentage of black shareholders is above 50%, you automatically qualify for a Level 3 BBBEE certificate, says FSP Business.
 
But as the Black Management Forum's made clear, one aspect of B-BBEE you should avoid at all costs is 'fronting'.
 
A red flag for compliance will go up if your businesses is suspected of 'Fronting – tokenism, superficial inclusion of historically disadvantaged individual,' says the Cape Gateway website.
 
So if you've claimed your company has 50% black ownership simply by listing the company gardener as a shareholder, watch out!
 
Passive ownership of enterprises leads to a form of 'fronting' that needs to be guarded against, says The Foundation for the Development of Africa.
 
Making sure the ownership you've reported in your employment equity report is accurate is the easiest way to prove your compliance with the Employment Equity Act.
 
 

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