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

Codes of Good Practice on Black Economic Empowerment

Marketing, Advertising and Communication (MAC) Sector Charter

3. Constitution of the MAC Charter Council




Advocacy body: Those members of the MAC Charter Council who endorse or influence the transformation and the MAC Transformation Charter, due to their work and/or stakeholders.


BEE: Is defined as an integrated and coherent socio-economic process that directly contributes to the economic transformation of South Africa and brings about significant increases in the number of black people who manage, own and control the country's economy, as well as significant decreases in income inequalities.


BEE accredited: Enterprises that have been accredited by the South African National Accreditation System, on behalf of the dti, and which meet the minimum technical and BEE criteria for rating agencies. The main role of the BEE-rating agencies is to provide an independent opinion on the B-BBEE status of enterprises. An accredited BEE-rating agency must have the capacity to evaluate, verify and confirm the BEE status of enterprises using the B-BBEE Scorecard as presented in Statement 000. An accredited BEE-rating agency cannot issue an opinion on an enterprise with which it has a conflict of interest.


BEE transactions: All transactions for the acquisition, by black people, of direct ownership in an existing or new entity (other than a small and medium-sized enterprise [SME] in the marketing and communication industry and in other sectors of the economy) and joint ventures with marketing and communication ventures or other equity investments in BEE companies (other than SMEs).


B-BBEE Codes of Good Practice: The dti publishes the Codes of Good Practice on BEE as per the requirements of the B-BBEE Act, 2003. The B-BBEE Codes of Good Practice are to be applied in developing, evaluating and monitoring BEE charters, initiatives, transactions and other implementation mechanisms. The statement contains basic principles and essential considerations, as well as guidance, in the form of explanatory and other material.


Black companies: Refers to companies that are more than 50% owned and controlled by black people.


Black-empowered companies: Refers to companies that are more than 25% owned by black people and where substantial participation in control is vested in black people.


Black-influenced companies: Refers to companies that are between 5% and 25% owned by black people and with participation in control by black people.


Black people: As defined in the B-BBEE Act, 2003, save that it is limited to South African citizens. In terms of the implementation of the Codes of Good Practice, the term is further defined as Africans, coloureds and Indians who are South African citizens. For avoidance of doubt, this term does not include juristic persons or any form of enterprise other than a sole proprietor. Regarding this definition, "black women" means black people who are women and "black-designated groups" means black people who are also workers, youth, people with disabilities or people living in rural areas.


Black SME: Refers to an SME with a turnover ranging from R500 000 to R20 million per year, which is black, a black company or a black-empowered company.


Black women empowerment enterprises: Refers to companies that are more than 30% owned by black women, and where substantial participation in control is vested in black women.


Broad-based ownership: Where an empowerment shareholder represents a broad base of members such as employees (to the extent that the options have actually been exercised), collective and/or communities, or where the benefits support a target group, for example black women, people with disabilities and the youth. Shares are held directly or indirectly through non-profit organisations and trusts. At the same time, directors and management of the groups should predominantly compromise black people.


Charter Council: Refers to a charter council established in terms of paragraph 4 (Role of Charter Council) of the B-BBEE Codes of Good Practice.


Company: Refers to an enterprise registered in terms of the Companies Act, 1973 (Act 61 of 1973), close corporations, trusts and any other such enterprise formed for business purposes. Control centres on the authority and power to manage assets, determination of policies and direction of business operations. Indicators of control may include participation in:

1. control structures of a business unit or of the company (such as shareholder meetings, board of directors, board subcommittees and divisional boards), the exercise of voting rights on the board of directors and committees thereof, and controlling equity;
2. executive management.


Discrimination: Refers to discrimination as defined in the promotion of Equality and Prevention of Unfair Discrimination Act, 2000 (Act 4 of 2000).


Designated investment: Refers to any form of statutory or voluntary deposit saving, investment or risk insurance placed or made by the South African public (whether of a wholesale or retail nature, but not by one financial institution in another).


Direct ownership: Refers to ownership of an equity interest together with control over all the voting rights attaching to the equity interest.


Duly constituted meeting: Refers to a meeting convened according to the standard rules adopted by the MAC SA or the MAC Charter Council.


Empowerment financing: Refers to the provision of finance for or investment in:

1.         targeted investment

2.         BEE transactions.


Enterprise development: Refers to support for existing, or fostering of, new black SMEs and BEE companies in the financial and other sectors of the economy.


Indirect ownership: Occurs where an institution or other investor owns equity in a company on behalf of beneficiaries and where there may not be direct participation by the beneficiaries in the voting rights.


Junior management: Means all employees with a package (excluding bonuses) in respect of which the cost to the employer is between R150 000 and R250 000 per year. If the bonuses are in excess of 50% of total remuneration, 50% of the bonuses will be included as part of the package. The salary bands will increase in line with consumer price index on 1 January each year, commencing on 1 January 2004.


MAC SA: A broad forum comprising representatives from each stakeholder group or industry who are signatories to the Transformation Charter, and who are guided by the MAC SA Constitution and its mandate.


Management: Management is divided into senior, middle and junior levels:

1. Senior management: All employees with a package (excluding bonuses) in respect of which the cost to the employer is R450 000 or more per year, but excluding all employees who fall within the definition of executive management.
2. Middle management: All employees with a package (excluding bonuses) in respect of which the cost to the employer is between R250 000 and R450 000 per year.


Procurement: Refers to all expenditure to acquire goods and/or services, including capital expenditure, but excluding:

1. broker commission
2. reinsurance premiums
3. commissions to insurance intermediaries
4. property and rental purchases (although property management is specifically included)
5. expenditure classes covered elsewhere in the charter e.g. salaries and wages (contract staff are regarded for this purpose as own staff and are excluded)
6. procurement spending where there is a natural monopoly
7. any items of procurement where the supplier is imposed in terms of a global policy for technical (but specifically not commercial) reasons
8. inter-entity charges for services rendered by other members of the group
9. social-investment expenditure and donations
10. all value-added tax payable.


Regulation or regulate: When used in this charter, it shall have a common law or economic meaning, depending on the context in which it is used.


Senior executive management: Refers to employees of an enterprise who are appointed by or upon the authority of the board of that enterprise, to undertake the day-to-day management of that enterprise, who have individual responsibility for the overall management (including financial management) of the enterprise and who are actively involved in developing and/or implementing the enterprise's strategy. Common examples of the senior executive management include without limitation, chief executive officers, chief operating officers and chief financial officers.


Small enterprise: A company is defined as a QSE if its annual turnover is between R5 million and R35 million, and if it follows the small enterprise scorecard. The small enterprise scorecard is "easier/more lenient" to achieve than the generic scorecard.


Definition provided by the National Small Business Act, 1996 (Act 102 of 1996):

"Small business" means a separate and distinct business entity, including co-operative enterprises and non-governmental organisations, managed by one owner or more which, including its branches or subsidiaries, if any, is predominantly carried on in any sector or subsector of the economy, which can be classified as a micro, a very small, a small or a medium enterprise.



Annual turnover


Very Small




1 million

2.5 million

15 million

25 million


1 million

5 million

15 million

30 million


Sound business practice: Refers to business practice which is conducive to establishing, maintaining and promoting:

1. domestic and international confidence in the marketing and communication sector;
2. best international practice and culture relating to creative production that reflects the aspiration of the people of South Africa;
3. sustainable sources of finance, taking cognisance of the different resources available;
4. level playing fields and competition between the different subsectors in marketing and communication;
5. sector value chain; and hence the avoidance of arbitrage between the subsectors;
6. BEE transactions taking place on willing-seller and willing-buyer basis.


Stakeholder: All groups, organisations or individuals who can affect or who are affected by achieving the objective of the MAC Transformation Charter and are signatories to the charter.


Targeted investment: Refers to debt financing of, or other forms of credit extension to, or equity investment in South African projects in areas where gaps or backlogs in economic development and job creation have been adequately addressed by financial institutions. It specifically means financing of, or investment in: marketing, advertising and communication transformational infrastructure projects that support economic development in underdeveloped areas and contribute towards equitable access to marketing, advertising and communication resources.


Voting member (MAC Charter Council): Any elected member of the MAC Charter Council, advocacy bodies and co-opted members, and who abide by the guidelines established by the MAC Charter Council and objectives of its constitution, are allowed to vote.


Voting member (MAC SA): A secretariat member represented on the MAC SA does not vote. All other members of the MAC SA, who abide by the objectives of the MAC SA Constitution and the guidelines established by the MAC SA, are allowed to vote.