Understanding Management and Control in the B-BBEE Scorecard

The Management and Control element of the B-BBEE scorecard is crucial in measuring the participation and representation of black South Africans in key decision-making roles within a company. This element assesses board members, executive directors, and other executive management positions. Points are awarded based on representation and voting rights, ensuring that black South Africans have a meaningful role in shaping business direction.

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Points Available on the B-BBEE Scorecard (Revised Generic Codes)

On the B-BBEE scorecard, a total of 9 points can be awarded for Management and Control, with an additional 3 points available if a company does not distinguish between "Other Executive" and "Senior Management" positions.

• Compliance Targets:some text
  • Black board representation: 50%, with at least 25% black female representation.
  • Black executive directors: 50%, with at least 25% black female representation.
  • Other Executive Management: 60% black representation, with 30% being black females.

These targets emphasize the importance of inclusive leadership structures.

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Verification Process for Management and Control

During a B-BBEE verification of the Management and Control element, certain documents and records are required to confirm compliance with transformation mandates. Here is an overview of the documentation needed:

Key Documents Required for Verification

1. Memorandum of Incorporation (MOI) – Signed:
   Details decision-making processes, including voting rights and director appointment methods.
2. Voting Rights of Directors:
   Confirms the processes by which directors participate in corporate decision-making.
3. Certified ID Documents and Payslips:
   Verifies the identities and employment statuses of executives.
4. Board Meeting Minutes:
   Confirms black directors' and managers' participation in board and executive meetings, illustrating meaningful involvement.
5. Employment Equity and Structure Reports:
   Ensures alignment with B-BBEE targets by analyzing employment equity reports.
6. Employment Documents (Payroll and COR39):
   Provides verification of black representation at the Board and executive levels.
7. Management Representation Confirmation Letter:
   Confirms the voting rights, race, gender, and nationality of board members, executive directors, and other executive managers.

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Role Players in Management Control

Management Control encompasses three distinct groups:

• Board of Directors
• Executive & Non-Executive Management
• Other Executive Management

Executive directors are involved directly in the company’s daily operations, while non-executive directors, typically not full-time salaried employees, represent the interests of specific shareholder groups. Non-executive directors ensure that these shareholders' interests are considered, contributing to a well-rounded management team.

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Building an Inclusive Corporate Environment

Meeting these verification standards not only improves a company's B-BBEE score but fosters an inclusive and equitable corporate culture. Companies that prioritize diversity in leadership are positioned for sustainable growth in South Africa.

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Closing the Gaps with Expert Guidance

Partnering with a B-BBEE Advisor can streamline the development of strategies and action plans to address compliance gaps and optimize your B-BBEE rating. For more guidance or assistance, contact Elevate Advisory Partners at info@elevateadvisory.co.za.

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