transformation and black economic empowerment
The Department of Trade and Industry’s (dti) draft Phase 2 of BEE Codes of Good Practice released in December 2005 are still out for comments and final Codes will be released in August/September 2006. Woolworths, like most companies in South Africa, awaits the finalisation of the Codes in order to conclude its BEE strategy and engage more meaningfully with its business partners on the issue. Linked to the finalisation of the Codes, is the accreditation of BEE rating agencies, which will contribute to the facilitation of consistent rating of companies, including Woolworths and its business partners i.e. suppliers and franchisees. Transformation for us, however, goes beyond compliance. We want to embed BEE as a way of working and therefore have a holistic approach to BEE and transformation.
BEE achievements in 2005/6
Woolworths BEE-specific achievements for the year under review include:
- the broadening of the executive board’s EE incentive modifiers to an incentive modifier encompassing a broad based BEE score target;
- commissioning the design of an employee share ownership scheme;
- developing and driving BEE deeper into the business unit by broadening the scope of the employment equity committees throughout the business to include broad based BEE;
- engaging with key suppliers to understand their empowerment credentials and making a commitment to support them, as key business partners, along their own transformation journeys as appropriate; and
- the integration of BEE key performance indicators into the job profiles, thus ensuring that BEE is measured as part of the integrated performance management process.
BEE challenges in 2005/6
The most significant challenge is for Woolworths systems and processes to provide information in line with the Codes to measure and monitor their empowerment credentials. This makes BEE measurement currently difficult, especially in the more complex areas such as skills development and preferential procurement.
Woolworths BEE credentials
It is our strategic intent to be a level 4 contributor by 2010. To deliver our 2010 target, our strategy is holistic and contribution will be made across all aspects of the scorecard
Education, engagement and communication around this strategy, ensuring ownership at all levels in the business, is key to delivering our intent.
2007 focus
delivery
equity ownership
Finalise and roll-out the employee share ownership scheme and a formalised preferential procurement policy.
employment equity
Intensify the focus on employment equity corporate-wide, integrating EE into the talent management processes.
skills development
To formalise and accredit learnerships with relevant Setas.
preferential procurement
Continue to encourage the appointment of BEE suppliers where appropriate and to work closely with existing suppliers to understand their current BEE score and, where applicable, provide input and assistance in improving the score.
enterprise development
Understand empowerment credentials of Woolworths franchisees and identify opportunities to assist empowered franchisees and identify new enterprise development opportunities that will add value to the Woolworths supplier base.
corporate social investment
Invite suppliers and franchisees to partner Woolworths in CSI initiatives, therefore contributing to their empowerment credentials.
communication and engagement
Drive business BEE strategies with clear plans for each business unit’s contribution to broad based empowerment. Entrench the role of the BEE committees and elect BEE champions for every business unit who will form a corporate committee to drive company-wide BEE issues for example, tenders and employment equity.
Communicate the transformation journey effectively to employees and intensify integration with our corporate culture transformation through initiatives such as deep diversity and trust workshops to ensure that the Woolworths environment is receptive to transformation.
measurement and monitoring
Roll-out the BEE measurement toolkit to ensure consistent reporting across the organisation, including suppliers, and instil a discipline of measuring empowerment efforts across all business units and transformation custodians in the business. Use this as a basis for a formal rating and audit by an independent dti-accredited BEE rating agency. Use BEE measures as a management and monitoring tool for Woolworths progress on empowerment.
