scholarly journals Reflecting on compliance with Broad-Based Black Economic Empowerment codes of good practice: Trends and suggestions

2021 ◽  
Vol 52 (1) ◽  
Author(s):  
Jan A. Dreyer ◽  
Suzette Viviers ◽  
Nadia Mans-Kemp
Keyword(s):  
Good Practice ◽  
Economic Empowerment ◽  
Black Economic ◽  
Black Economic Empowerment

scholarly journals The association among the seven elements of the black economic empowerment score and market performance

2014 ◽  
Vol 17 (5) ◽  
pp. 544-556 ◽  
Author(s):  
Cara Maria Van der Merwe ◽  
Petri Ferreira
Keyword(s):  
Good Practice ◽  
Negative Relationship ◽  
Positive Association ◽  
Management Control ◽  
Economic Empowerment ◽  
Significant Positive Association ◽  
Black Economic ◽  
Black Economic Empowerment ◽  
Prior Literature ◽  
Policy Analysts

The black economic empowerment (BEE) score consists of seven elements, namely ownership,management control, employment equity, skills development, preferential procurement, enterprisedevelopment and socio-economic development. The purpose of this study is to establish whether anassociation exists between an entity’s BEE elements and its share returns in the short term.Based on prior literature, it appears that the market reacts positively to an announcement of a BEE deal,although the literature also indicates that an entity’s BEE score, which includes all seven elements of theBEE score, bears a negative relationship to its share returns. Therefore the association between the variousBEE elements and share returns needs to be investigated. The study uses a multivariate regressionanalysis that controls for factors influencing share returns. The study includes the BEE element data asobtained from the survey of the top empowerment companies carried out by Empowerdex/Financial Mail forthe period 2005 to 2011.The results of this study indicate that a significant positive association exists between the managementcontrol element of the BEE score and the entity’s share returns. Furthermore, a significant negativeassociation exists between the ownership and preferential procurement elements of an entity and its sharereturns. This study contributes to the literature on BEE in the accounting and finance field in South Africa aswell as enhances the understanding and effect of BEE compliance through implementation of the genericscorecard as required by the 2007 codes of good practice. The results of this study would be of interest togovernment policy analysts, investors and managers.

The performance of the Broad Based Black Economic Empowerment compliant listed property firms in South Africa

2016 ◽  
Vol 34 (1) ◽  
pp. 3-26 ◽  
Author(s):  
Omokolade Akinsomi ◽  
Katlego Kola ◽  
Thembelihle Ndlovu ◽  
Millicent Motloung
Keyword(s):  
Stock Returns ◽  
Factor Model ◽  
Stock Exchange ◽  
Sharpe Ratio ◽  
Economic Empowerment ◽  
Content Type ◽  
Black Economic ◽  
Black Economic Empowerment ◽  
The Government ◽  
The Impact

Purpose – The purpose of this paper is to examine the impact of Broad-Based Black Economic Empowerment (BBBEE) on the risk and returns of listed and delisted property firms on the Johannesburg Stock Exchange (JSE). The study was investigated to understand the impact of Black Economic Empowerment (BEE) property sector charter and effect of government intervention on property listed markets. Design/methodology/approach – The study examines the performance trends of the listed and delisted property firms on the JSE from January 2006 to January 2012. The data were obtained from McGregor BFA database to compute the risk and return measures of the listed and delisted property firms. The study employs a capital asset pricing model (CAPM) to derive the alpha (outperformance) and beta (risk) to examine the trend amongst the BEE and non-BEE firms, Sharpe ratio was also employed as a measurement of performance. A comparative study is employed to analyse the risks and returns between listed property firms that are BEE compliant and BEE non-compliant. Findings – Results show that there exists differences in returns and risk between BEE-compliant firms and non-BEE-compliant firms. The study shows that BEE-compliant firms have higher returns than non-BEE firms and are less risky than non-BEE firms. By establishing this relationship, this possibly affects the investor’s decision to invest in BEE firms rather than non-BBBEE firms. This study can also assist the government in strategically adjusting the policy. Research limitations/implications – This study employs a CAPM which is a single-factor model. Further study could employ a multi-factor model. Practical implications – The results of this investigation, with the effects of BEE on returns, using annualized returns, the Sharpe ratio and alpha (outperformance), results show that BEE firms perform better than non-BEE firms. These results pose several implications for investors particularly when structuring their portfolios, further study would need to examine the role of BEE on stock returns in line with other factors that affect stock returns. The results in this study have several implications for government agencies, there may be the need to monitor the effect of the BEE policies on firm returns and re-calibrate policies accordingly. Originality/value – This study investigates the performance of listed property firms on the JSE which are BEE compliant. This is the first study to investigate listed property firms which are BEE compliant.

Black Economic Empowerment, ICT, and Preferential Public Procurement in South Africa

2013 ◽  
pp. 1164-1185
Author(s):  
Karunanidhi Reddy ◽  
Renitha Rampersad
Keyword(s):  
South Africa ◽  
Black People ◽  
Public Procurement ◽  
Economic Transformation ◽  
Economic Empowerment ◽  
Black Economic ◽  
Black Economic Empowerment ◽  
Constitutional Right ◽  
The Government ◽  
Procurement System

Broad-based black economic empowerment has been a central part of the South African government’s economic transformation strategy. The main purpose of BEE is to increase the number of black people that manage, own, and control the country’s economy, and as a result, to reduce income inequalities and to contribute to economic transformation in South Africa. During apartheid in South Africa, the government procurement system favoured large, established businesses and made it difficult for newly established businesses to participate in the procurement system. This chapter gives an overview of the Black Economic Empowerment policy as a means to achieve socio-economic transformation in South Africa by providing preferences for Historically Disadvantaged Individuals (HDIs) and small businesses, when making procurement decisions. It also examines how procurement is used as a policy tool by government while simultaneously ensuring that it does not contradict the constitutional right to equality. The chapter also explores the implications of the Preferential Public Procurement Framework Act (Act 5 of 2000) and the latest procurement regulations. Finally, it discusses the use of ICT and the vital role it plays in preferential procurement in South Africa.

Distance Makes the (Committed) Heart Grow Colder: MNEs’ Responses to the State Logic in African Variants of CSR

2016 ◽  
Vol 57 (3) ◽  
pp. 562-594 ◽  
Author(s):  
Colin David Reddy ◽  
Ralph Hamann
Keyword(s):  
South African ◽  
Multinational Enterprises ◽  
Home Country ◽  
Institutional Logics ◽  
Local Context ◽  
Economic Empowerment ◽  
Black Economic ◽  
Black Economic Empowerment ◽  
Using Data ◽  
Corporate Social

The question of how multinational enterprises (MNEs) respond to local corporate social responsibility (CSR) expectations remains salient, also in the context of many African governments’ attempts to define and regulate business responsibilities. What determines whether MNEs respond to such local, state-driven expectations as congruent with their global commitment to CSR? Adopting an institutional logics perspective, we argue that a higher global CSR commitment will lead to higher local responsiveness when regulatory distance is low, but it will lead to lower local responsiveness when regulatory distance is high. We find support for our hypothesis using data on 93 MNEs’ responses to the South African state’s Broad-Based Black Economic Empowerment policy. We thus contribute to the global–local CSR literature and show how MNEs’ local CSR responsiveness will be shaped by not only the local context but also their home country and firm-internal environments.

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