B-BBEE (Broad-Based Black Economic Empowerment) is a South African government policy designed to increase economic participation and ownership by black people, women, and other disadvantaged groups in the country. The B-BBEE score is a measure of a company’s commitment and contribution to B-BBEE policy.

The process of rating a company’s B-BBEE score is rigorous and is based on the B-BBEE Codes of Good Practice. The Generic Codes of Good Practice apply to most companies, except for certain sectors, like the tourism or construction sectors, which have their own specific codes. Below are the elements and considerations in evaluating a company’s B-BBEE score:

Elements of B-BBEE Scorecard:

  1. Ownership (25 points): Measures the level of black ownership in a company.
  2. Management Control (15 points): Evaluates the participation of black people in top management positions.
  3. Skills Development (20 points): Assesses the investment in the training and development of black employees.
  4. Enterprise and Supplier Development (40 points): Evaluates the extent to which companies support black enterprises through procurement, supplier development, and enterprise development.
  5. Socio-Economic Development (5 points): Measures the company’s contribution to socio-economic development initiatives.

Rating Process:

  1. Pre-assessment: a. The company undergoes a pre-assessment to establish a baseline score. b. Companies develop a B-BBEE strategy to address areas of improvement identified in the pre-assessment.
  2. Collection of Evidence: a. Companies collect evidence demonstrating compliance with the B-BBEE Codes of Good Practice. b. Evidence may include ownership documents, management structures, skills development records, procurement records, etc.
  3. Verification by an Accredited Agency: a. An accredited B-BBEE verification agency reviews the collected evidence. b. The verification process includes site visits, interviews, and document verification.
  4. Scoring: a. The agency scores each element based on the provided evidence. b. Each element has sub-elements and targets, with points awarded based on the level of compliance. c. The points from all elements are totaled to give the overall B-BBEE score.
  5. Rating: a. Based on the overall score, companies are rated on a scale from Level 1 (highest level of compliance) to Level 8 (lowest level of compliance). b. A Level 1 contributor is considered to have the highest B-BBEE contribution level, while a Level 8 contributor has the lowest.
  6. Certificate Issuance: a. After completing the verification process, the company receives a B-BBEE certificate indicating its B-BBEE level. b. The certificate is valid for one year, after which the company needs to undergo the verification process again.

Exempted Micro Enterprises (EMEs) and Qualifying Small Enterprises (QSEs)

  • Exempted Micro Enterprises (EMEs): Businesses with an annual turnover of less than R10 million are exempt from the B-BBEE rating process and are automatically categorized based on their turnover.
  • Qualifying Small Enterprises (QSEs): Businesses with an annual turnover between R10 million and R50 million are evaluated under a slightly modified scorecard.

Compliance Levels:

  • Level 1: ≥ 100 points
  • Level 2: 95 – 99 points
  • Level 3: 90 – 94 points
  • Level 4: 80 – 89 points
  • Level 5: 75 – 79 points
  • Level 6: 70 – 74 points
  • Level 7: 55 – 69 points
  • Level 8: 40 – 54 points

Companies aspiring to do business with the government or other entities that prioritize B-BBEE ratings should actively work towards improving their scores by focusing on the various elements of the B-BBEE scorecard.