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PRIVATE SECTOR VIEW ON BEE

Highlighting the views of the private sector on Black Economic Empowerment (BEE) in the context of the investment market, including market caps, investment figures, and the need for BEE initiatives. Explore trends, measures of empowerment, common challenges, and the way forward in addressing BEE in the financial sector.

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PRIVATE SECTOR VIEW ON BEE

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  1. PRIVATE SECTOR VIEW ON BEE ABEL SITHOLE EXECUTIVE DIRECTOR: METROPOLITAN 19 May 2003

  2. The investments market • JSE Equities Market Cap – R1300 billion • JSE Bond Market Cap – R 356 billion • TOTAL OVER R1600 BILLION Sources: I-Net Bridge,Alexander Forbes & UP Unit Trusts Survey ALSI: 16/05/03, ALBI 31/03/03; RF- Dec 02; UT – 31/03/03; TI – 31/03/03

  3. The investments market • Retirement Funds – R1 100 billion • Unit Trusts – R 172 billion • Targeted Investments – R 9 billion • TOTAL OVER R1280 BILLION Sources: I-Net Bridge,Alexander Forbes & UP Unit Trusts Survey ALSI: 16/05/03, ALBI 31/03/03; RF- Dec 02; UT – 31/03/03; TI – 31/03/03

  4. IS THERE STILL A NEED FOR BEE? Source: Empowerdex Empowerment Watch Survey of JSE listed companies 2002

  5. Main occupational groups Source: Census ‘96

  6. Focus on employment equityand skills develpment Source: Census ‘96

  7. Is there still a need for bee? • Yes • No commitment to change • Progress made minimal

  8. The definitions • Black companies • Companies 50.1% owned • Black empowered companies • Companies 25% - 50% owned • Black influenced companies • Companies 5% - 25% owned

  9. Financial services companieslisted on the jse 2002 Source: Empowerdex empowerdex watch Broad based economic empowerment survey of JSE listed companies 2002

  10. Measures of empowerment • Empowerdex • Pillars • Ownership • Management and Control • Employment Equity • Skills Development • Preferential Procurement • Enterprise Development • Corporate Social Investment Source: Empowerdex empowerdex watch Broad based economic empowerment survey of JSE listed companies 2002

  11. Measures of empowerment • Empowerment Barometer • Pillars • Employment Equity • Procurement • Corporate Social Involvement • Skills Development • Control (shareholding and directors) • Empowerment Culture Owned by Metropolitan

  12. Progress made

  13. Common trends • Pioneering Deals • Few black shareholders • Cons: ‘empowerment at holding levels did not filter through’ • Middle children • Union shareholders, through union investment companies • Cons: ‘complicated funding structures led to loss of investments’

  14. Common trends • Today • Few black shareholders • Are we repeating past mistakes? • If yes, why? • If not, how are we different?

  15. Scorecard • Common Pillars • Ownership • Management and Control • Employment Equity • Skills Development • (Preferential) Procurement • Corporate Social Investment ? ?

  16. Who’s responsibility? • Private Sector • Government • All other stakeholders • Retirement fund trustees • Society

  17. Way forward…

  18. Financial sector bee charter • Background • Low levels of black participation in sector • Ownership • Control • Skills • Management • Sector dominance by large institutions • Inadequate response by sector to demand for financial services

  19. Who’s responsibility?

  20. Together we can

  21. THANK YOU

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