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

Industry Charters

Financial Services  Charter

Code Series FS200: The Measurement of the Management and Control Element of Broad-Based Black Economic Empowerment

4. Key measurement principles


4.1 Subject matter of this paragraph:


4.1.1 This paragraph relates to the following statements within the Generic CoGP: Code 200 Statement 200; and Code 800 Statement 802.


4.2 Applicability of the CoGP: The provisions and principles contained in the relevant statements apply to all financial institutions, subject to the following variations:


4.2.1 The following terms when used in this FS Code have these meanings: Top Management means employees of a financial institution who are members of the occupational category of "Top Management" as determined using the EE Regulations and as defined in Code 200 of the CoGP. Senior Top Management means any Top Management of a financial institution, appointed by or on the authority of the Board to undertake the day-to-day management of that financial institution and who:
Have individual responsibility for the overall management and for the financial management of that financial institution; and
Are actively involved in developing and implementing the financial institution's overall strategy, as defined in Code 200 of the CoGP. Other Top Management means any Top Management of a financial institution that does not meet the definitional requirements of the category Senior Top Management.


4.2.2 The measurement principle referred to as the Adjusted Recognition for Gender does not apply to measurement of Management Control contributions under this Code.
If, in terms of a Global Policy to which a financial institution, that is a 100% owned local subsidiary of a multinational or external company (Section 1 of the Companies Act (Act 71 of 2008, as amended, repealed or superseded) or branch of a multinational or external company, is subject
Any Board members, executive or senior managers (who are not South African citizens) who are imposed on the local operation, those personnel will not be taken into account for the purposes of calculating ratios in terms of this paragraph.


4.2.3 Notwithstanding the provisions of paragraph 4.2.2 above, any such exclusion of "imposed" personnel shall be limited to a maximum of 20% of the total number of individuals within the specified category of Management. There shall be a sub–minimum of 1 person allowed to be excluded. Notwithstanding 4.2.3 above, should an institution subject to global policy, send black South African employees, who are the intended beneficiaries of this Code, on secondment or rotation to branches abroad, they shall be allowed to exclude one (1) additional foreign imposed staff for every one (1) intended beneficiary sent abroad in addition to the 20% cap.


4.2.4 A financial institution that is a branch of a multinational or external company that does not have a local Board of Directors will be exempt from the Management Control provisions for Board representation, but may elect to deem their Executive Committees as a Board of Directors, subject to the deeming provisions of paragraph 3 above. To avoid any doubt, an entity must elect to deem its Executive Committee or elect to be excluded from the provisions for Board representation and once that election has been made, the measured entity must maintain that election until the first full review of this Code to be conducted after 31 December 2017. Measured Entities electing to be excluded from the provisions for Board representation will still be measured for Top Management as per paragraph 2.2.


4.2.5 Notwithstanding the provisions of paragraph 4.2.4, any person including non-South African citizens serving on the Board or the Top Management of a financial institution and not excluded from measurement under that paragraph, shall be subject to the definition of a Black person as stipulated in part 2 of Schedule 1 of Section 9(1) of the B-BBEE Act.


4.3 A Measured Entity must use the data, in calculating its score under the Management Control scorecard, used in its return with the Department of Labour under the Employment Equity Act. This does not apply to Measured Entities exempt from filing such returns.


4.4 A Measured Entity that does not distinguish between Top Management and Senior Management may include its Senior Management under this statement. If a Measured Entity adopts this approach:


4.4.1 The corresponding targets for Senior Management in Code FS300 will apply to the Management Control scorecard.


4.4.2 Senior Management included in this statement is not measurable under Statement FS300.


4.5 If a Measured Entity does not distinguish between Senior Top Management and Other Top Management, then Top Management is measurable as:


4.5.1 Top Management – 2,5 Points


4.5.2 Black Women Top Management – 2,5 Points


4.6 If Measured Entities do appoint Independent Non-Executive Board Members, they are encouraged to appoint persons who do not serve in that capacity for any other Measured Entity.