By nature and convention, businesses struggle to be altruistic. The profit motive is built into legislation all around the world. Profit is hard-won and ‘giving it away’ is counter-intuitive.
It takes a fresh way of looking at things to enable business to automatically serve a social need while doing business as usual.
The various industry charters that have defined Broad-Based Black Economic Empowerment (B-BBEE) structures as a vehicle for transformation mean well. But they’re not innovative enough. They’re riddled with old-style business thinking, predicated on debt funding and keep shareholders away from the heart of the business.
Therefore, B-BBEE structures add complexity and cost to an already fraught business environment. And, they have limited impact in terms of truly benefiting members of society at grassroots, where the need for a share in business success is most urgent.
The inherent irony is that B-BBEE can be easily achieved by having grassroots people play a direct role in the success of the business. All it takes is for their B-BBEE shares to be listed on a stock exchange and traded in a restricted market. This drives a whole new behavioural pattern as individual citizens take an interest in the company, naturally building education levels, increasing the value of the shares, and turning the B-BBEE structure into a bottom line contributor in which ordinary people have a vested interest.
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Etienne Nel is the CEO of SA’s newest stock exchange ZAR X