True BEE is achieved by real people, not quotas

The Chamber of Mines says 26 percent of South Africa’s mines are in black hands, but many interested parties say this figure is suspect, illustrating that statistics can be used to support either side of an argument. Leadership qualities like self esteem and tenacity cannot be legislated or forced into existence; nor can they be tracked through target setting and measurement. Yet they are crucial to mobilising the capital, power and opportunity yielded by black economic empowerment (BEE) to generate economic and social value; and to establish a cycle of wealth creation and development, promised, but so far not delivered, by BEE policy. The authorities waste energy on finding excuses as to why they should not be held responsible for BEE failures instead of learning and changing.

Some of Labour Minister Mildred Oliphant’s criticism of the business establishment (“Still too few black managers”, Business Day, August 4) is justified but points to only part of the problem. By blaming racism and resistance to change, the Department of Labour deflects its responsibility. While quick to criticise “white business”, the champions of BEE do not explain why some people in the designated groups benefit and others don’t. Significant parts of BEE legislation support an investment-oriented and organic approach to transformation, and recognise the differences between the needs of businesses. But those that comply by taking a longer-term, more systemic approach to BEE, have by implication been castigated for not handing over wealth and power. Moreover, the minister’s silence on tenderpreneurship and tokenism implies acceptance of such corruption.

Legislation now in the pipeline proposes mandatory BEE ownership quotas on all businesses, big and small alike, even if they are already compliant. Government control of small business ownership goes against the “entrepreneurial grain” on which the government is depending to create jobs and generate economic growth. We naturally sympathise with those similar to ourselves, but as leaders, the labour minister and the head of the Employment Equity Commission need to rise above their allegiances and appreciate both sides of the BEE dilemma. Oliphant and her associates could learn from Sports Minister Fikile Mbalula. He has skilfully used rhetoric, symbolism, humour and savvy to unify South Africans around the 2011 Rugby World Cup, encouraging all sides without compromising the transformation agenda, inspiring hope.

Economic success requires credible, talented people who invest their capital and energy and apply skills wisely. The investment energy that distinguishes commitment from compliance is what generates economic value. Oliphant’s lack of leadership relegates BEE compliance to a kind of guilt tax. What we need is a way of integrating BEE with the mainstream, of clearly distinguishing those previously disadvantaged business people and professionals who have the potential or already do fulfil the necessary criteria, from the tokens and beneficiaries of nepotism. It is her responsibility to encourage people to believe in their capacity to create value. A visit to the centre of Johannesburg shows what people are capable of when they apply themselves. This holds our future, not the sterile social engineering by the Department of Labour that only shrinks the viable job creation sectors.

Jonathan Yudelowitz is a joint managing director of YSA Limited and author of Smart Leadership.