Johannesburg - As we continue to celebrate and reflect on 20 years of democracy, we acknowledge the transformational strides that South Africa has taken in many industries.
We are equally aware that more work awaits us and that this should be done with planning and pace.
The financial services sector, in particular, remains at the forefront of transformation, ensuring more South Africans are financially included in the economy.
A study last year by FinScope found that the proportion of adults in South Africa who were banked had risen to 75 percent from 67 percent in 2012.
Furthermore, the proportion of adults who are deemed to be financially included had risen to 84 percent from 81 percent.
While the black economic empowerment (BEE) transformational environment has become more demanding following the promulgation of the revised codes of good practice, it also reflects a reorientation of transformation policy to better address some of the challenges, including fronting and the drive to create more black entrepreneurs through greater focus on skills development and enterprise and supplier development.
The principles behind broad-based BEE (B-BBEE) seek to ensure a more equitable society with a greater proportion of black ownership across all industries.
This has yet to be realised, with research showing that less than a quarter of the shares on the JSE are owned by black South Africans.
Some claim that far from increasing black ownership, BEE and the subsequent B-BBEE framework may have precluded some international investment and, second, resulted in “fronting”, where some companies may not comply with the codes of good practice and, if they do, this is primarily to obtain public work.
The financial sector is committed to promoting a transformed, vibrant, and globally competitive industry that reflects the demographics of South Africa and contributes to the establishment of an equitable society by providing accessible services to black people and directing investment into targeted economic sectors.
The University of Western Cape’s second Baseline Report 2013 showed that 61 percent of large companies’ B-BBEE scores lay between levels 4 and 6.
However, companies in the financial sector, specifically the bigger banks, on average achieved scores between levels 2 and 3.
Nedbank has achieved a level 2 B-BBEE rating for five consecutive years. We believe that transformation transcends compliance and consider it a business and moral imperative to enable sustainable socio-economic benefits for all.
We have made great strides towards addressing the imbalances of the past in the organisation. Fifty-four percent of our board representation is black, with women accounting for 24 percent of this.
In fact, generic black and, particularly, black woman management representation across the various levels has been steadily improving over the years – with 79 percent of training spend being deliberately allocated to black employees.
Also, the Nedbank Eyethu Share Scheme launched in 2005 has seen a net value growth of more than R6.7 billion and more than R747 million been paid out in dividends to black employees, clients and communities.
In a wider economic context, more needs to be done to bring people, especially those living in rural areas, into the economic mainstream.
While this remains a challenge in a country with high unemployment and low gross domestic product growth, targeted initiatives can position us on this path.
It is for this reason that Nedbank has embarked on a number of initiatives, including its partnership with its black business partners Women’s Investment Portfolio Holdings Limited and the Brimstone-Mtha-we-Mpumelelo Consortium, which have laid the foundation for further growth and transformation across the group and our client base.
Alongside these partners, Nedbank’s Imbizo project supports and nurtures micro businesses in rural communities as well as exploring new ways of doing business to ensure that these communities derive social and economic benefit from the enterprises that operate within them.
The programme also provides mentorship to small and medium enterprises to ensure their sustainability and growth.
Looking ahead, it is a reality that most of the BEE deals launched over the past 10 years will mature, meaning that companies may need to consider new structures or vehicles that will ensure continued black ownership.
This must be done in a tough and often unstable economic environment where capital outlay will be required.
Although there are significant changes to the revised codes of good practice that will imply a drop in levels, Nedbank remains committed to transformation and will participate in an industry realignment process through the Banking Association of South Africa and the Financial Sector Charter Council.
Also, we will continue to build on our solid empowerment credentials and drive transformation throughout the company and the country by working to empower and uplift all citizens and encourage the growth of emerging black entrepreneurs.
Kershini Govender is Nedbank’s divisional executive for transformation, strategy and alignment