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Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)

Sector Codes

Defence Sector Code

16. Elements of the Defence Sector Code: Large Entities Scorecard

16.2 Management Control

 

16.2.1 The objective of Management Control is that Black people should be actively involved in making strategic decisions, proportionate to their Economic Interest in the board of directors of the Measured Entity and in the various levels of management. This means participation at the following levels:
16.2.1.1 Proportional representation at the non-executive and executive board level that is geared to give strategic direction to the Measured Entity, without restrictions that may be linked to the indebtedness of the shareholders they represent, even if this indebtedness arises out of financing the acquisition of the shareholding that necessitated their board participation; and
16.2.1.2 Executive management – including key strategic positions that could include Chief Executive Officer, Chief Operating Officer, and Chief Financial Officer among others, that is accompanied with the requisite executive powers to make decisions, including budget allocation and deployment, staff appointment and such powers as are ordinarily exercised within corporations by persons occupying such positions.

 

16.2.2 These positions should not be subject to any restrictions that are out of the ordinary nor token positions specifically created for Black executives.

 

16.2.3 The gazetting of the Defence Sector Code shall not affect the obligation of a designated employer’s obligation to comply with the Employment Equity Act and Regulations as amended from time to time.

 

16.2.4 Boards

 

16.2.4.1 Large Measured Entities commit to achieve the following targets on their boards of directors –
16.2.4.1.1 50% Black representation within the first year of the promulgation of the Sector Code increasing to 60% (sixty) per cent by the third anniversary of the promulgation; and
16.2.4.1.2 25% Black female within the first year of the promulgation of the Sector Code increasing to 30% (thirty) per cent by the third anniversary of the promulgation and after the promulgation of the Sector Code.

 

16.2.5 Executive Management

 

16.2.5.1 Measured Entities commit to achieve the following targets—
16.2.5.1.1 60% Black executive directors; and
16.2.5.1.2 30% Black female executive directors.

 

16.2.6 The compliance target for senior, middle and junior management in the Management Control Scorecard are based on the national and regional demographic representation of Black people as defined in the Regulations of the Employment Equity Act No.55 of 1998 as amended from time to time.

 

16.2.7 In determining a Measured Entity’s Score, the targets should be further broken down into specific criteria according to the different race sub-groups within the definition of Black in accordance with the Employment Equity Act on an equitable representation and weighted accordingly.

 

Management Control Scorecard

 

B-BBEE

Element

Indicator

Description

Weighting

Points

Compliance Target

Year

1 - 2

Year

3

Management Control
1. Board Participation
1.1 Exercisable voting rights of Black board members as a percentage of all board members

2

50%

60%
1.2 Exercisable voting rights of Black Military Veterans board members as a percentage of all board members

1

30%

30%
1.3 Exercisable voting rights of Black female board members as a percentage of all board members

1

25%

30%
1.4 Black Executive directors as a percentage of all executive directors

1

50%

60%
1.5 Black female Executive directors as a percentage of all executive directors

1

25%

30%
2. Other Executive Management
2.1 Black Executive Management as a percentage of all executive management

2

60%

60%
2.2 Black female Executive Management as a percentage of all executive management

1

30%

30%
3. Senior Management
3.1 Black employees in Senior Management as a percentage of all senior Management

2

60%

60%
3.2 Black female employees in Senior Management

1

30%

30%
4. Middle Management
4.1 Black employees in Middle Management as a percentage of all Middle Management

2

75%

80%
4.2 Black female employees in Middle Management as a percentage of all Middle Management

1

38%

40%
5. Junior Management
5.1 Black employees in Junior Management as a percentage of all Junior Management

1

88%

90%
5.2 Black female employees in Junior Management as a percentage of all Junior Management

1

44%

45%
6. Employees with disabilities

Black employees with disabilities as a percentage of all employees

2

2%

3%

 

Total

15 points