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Tag: Governance

Why every board needs an AI expert

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Boards need someone who can translate between engineers, risk teams, and directors – someone able to challenge optimistic assumptions and set measurable guardrails.

Is B-BBEE now a deal-breaker in M&A?

B-BBEE

By Ginen Moodley Broad-Based Black Economic Empowerment (B-BBEE) is no longer a side issue in mergers and acquisitions (M&A) – however, the answer to whether it is a true deal-breaker depends on how you look at it.  Legally, the framework does not yet give regulators the authority to block a deal outright on B-BBEE grounds. Commercially, however, a weak empowerment profile can derail a transaction just as effectively – through delays, onerous conditions, reputational damage or lost investor confidence. The Competition Commission has confirmed that B-BBEE will now form part of the public interest assessment in merger approvals. This shifts due diligence beyond financial and operational metrics to include a target company’s empowerment status, ownership structure, and scorecard history. A poor B-BBEE profile may not be enough to stop a deal legally, but it can slow it to a crawl, invite tough conditions or spark public backlash that erodes deal value. In July, Parliament’s Portfolio Committee on Trade, Industry and Competition has called for greater transparency, fairness, and accountability in M&A deals, particularly with regard to imposing public interest conditions in terms of transformation and the inclusion of historically disadvantaged persons (HDPs). The Trade, Industry and Competition Committee has gone further, urging the Competition Commission to adopt an activist approach by publishing details of historically disadvantaged partners in approved transactions, creating a centralised database to help companies identify empowerment participants, and embedding lock-in periods to ensure ownership structures deliver real value. These signals point to a regulatory and political environment where transformation is no longer negotiable.This is not only a policy debate, it is already playing out in the market. When Heineken’s acquisition of Distell and Namibia Breweries was approved in April 2023, the deal was cleared on condition that the new entity, HEINEKEN Beverages, committed to substantial transformation initiatives. These included an ambitious investment plan of more than €500m over five years, the construction of a new brewery and maltery, a supplier development and localisation fund, and a Tavern Transformation programme to support 1 000 tavern owners. The heightened pressure in M&A coincides with broader compliance reforms. In April 2025, the Minister of Employment and Labour published final employment equity targets for 18 sectors. Designated employers must submit five-year plans by 31 August 2025 or face fines and exclusion from state contracts. The burden of proof has also shifted: companies must now demonstrate valid reasons for falling short. Compliance is being measured on outcomes, not intentions. Small businesses are also under the spotlight. Exempted Micro Enterprises must now file B-BBEE affidavits that include industry classification codes and confirmation of permanent black ownership, submitted directly to sector charter councils. This aims to curb fronting and ensure empowerment translates into genuine participation. Meanwhile, the legal profession has been reshaped by the Legal Sector Code. Firms are required to demonstrate 50% black ownership, spend 3.5% of payroll on black skills development, and procure more from black-owned legal service providers. Similar industry-specific codes are tightening across the economy, reflecting a broader move from broad-brush compliance to precise, enforceable sector obligations. Ownership remains one of the trickiest areas. The Codes of Good Practice assess not just shareholding but also voting rights, economic interest, and the sustainability of structures. Community trusts, employee share schemes, and equity equivalents are useful mechanisms, but when poorly designed, they risk collapsing under scrutiny. In an M&A environment, these weaknesses can undermine approvals or unravel a deal later. For dealmakers, this means that B-BBEE due diligence can no longer be superficial. It is not enough to glance at a scorecard; regulators and stakeholders are scrutinising the substance behind the numbers. Ownership structures, employment equity compliance, procurement practices, and even historical scorecard performance can all influence whether a deal is approved smoothly or delayed with conditions.  So, is B-BBEE now a deal-breaker in M&A? From a legal perspective, the Competition Commission cannot yet veto a merger solely on B-BBEE grounds, but commercially the risks are real: a weak empowerment profile can translate into reputational damage, loss of investor confidence, and transaction timelines stretching out indefinitely. Transformation has become a decisive factor in whether deals succeed or stall. Businesses that understand this distinction and embrace transformation as a strategic necessity rather than a compliance burden will not only secure smoother approvals but also build credibility and resilience in an economy where inclusivity is inseparable from growth. Ultimately, the question is not whether B-BBEE is a formal deal-breaker under current law, but whether businesses can afford to treat it as anything less. The direction of policy, enforcement and market expectation is unmistakable. Dealmakers who integrate transformation into their transaction planning will navigate approvals with greater certainty, protect deal value and position themselves for long-term relevance in an economy where inclusivity is fast becoming a cornerstone of commercial success. Ginen Moodley is a corporate and commercial attorney and the founding director of Moodley Attorneys Incorporated (MAinc), a South African law firm specialising in Business Advisory, Commercial Transactions, Dispute Resolution, and Estate Planning.

South Africa’s best managed companies revealed in landmark 15th edition

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The 15th edition of Top500: South Africa’s Best Managed Companies is due to be released in the final quarter of 2025. This prestigious annual B2B publication features companies that are top of their game, and sector, presenting an opportunity for businesses to tell their success stories, and increase their exposure among peers, competitors and potential business partners. How do you define a top company? For our purposes, using criteria developed by UCT’s Development Policy Research Unit, we look at whether a business is large, growing, productive, empowered, engaged and quality driven. Through our dedicated research team, for a decade and a half, we have documented the excellence evident in South African businesses across a hundred sectors with the top five weighted and ranked – hence the magazine’s title. This year, in its quest to uncover South Africa’s Top 500 Best Managed Companies, Topco Media’s research department has uncovered some interesting facts about the South African economy: Real estate holdings and development The real estate holdings and development sector in South Africa showed resilience during the last financial year, with varied performance across segments. Companies focusing on high-demand areas like logistics, mixed-use residential developments, and green buildings achieved notable success through strategic planning and innovation. Despite challenges from rising interest rates, higher construction costs, and pressures on commercial office space, well-capitalised and agile firms delivered solid returns and sustainable growth. Leading B-BBEE-compliant companies such as Redefine Properties, Growthpoint Properties Limited, SA Corporate Real Estate Ltd, Attacq Limited, and Vukile Property Fund also actively promote gender empowerment and contribute meaningfully to their CSI initiatives. Water South Africa’s water sector showed progress this year with improved governance, faster licensing, and major infrastructure investments like the Lesotho Highlands Phase 2. Monitoring systems (Blue/Green Drop) resumed, and over R23bn was secured for key projects. Several water utilities, including Rand Water, Magalies Water, and Vaal Central Water, reported increased revenues and stronger financial performance. All five major South African water utilities Rand Water, uMngeni-uThukela Water, Johannesburg Water SOC Limited, Vaal Central Water, and Magalies Water actively support community development and environmental sustainability. They run programs for water conservation education, infrastructure improvements in underserved areas, and skills development. While some face challenges like infrastructure maintenance, overall, these utilities show strong commitment to ESG goals and improving water access. Investment services Over the last financial year, JSE Limited, Sasfin Holdings, Vunani Limited, PSG Financial Services, and Purple Group Ltd delivered solid revenue growth and strong financial results. They also advanced gender empowerment by increasing female representation in leadership and launching impactful diversity initiatives. For example, Sasfin expanded its asset base, Vunani improved profitability despite market challenges, PSG strengthened its investment portfolio, Purple Group enhanced its digital wealth management offerings, and JSE Limited made strides in promoting inclusive governance. This combination of financial success and commitment to inclusion highlights their leadership in South Africa’s financial services sector. Mining in general: Overview The South African mining sector is currently experiencing mixed performance. While some commodities and companies show resilience, many face significant challenges. Several major mining companies posted sharp revenue declines or losses in 2024: While the South African mining sector faces headwinds, certain commodities and companies are navigating these challenges effectively. Investors may find opportunities in resilient sectors like manganese, coal, and copper, especially those companies investing in renewable energy and technological advancements. However, it’s crucial to remain cautious of the broader systemic issues that could impact long-term stability. For more important business-related content, inside the magazine you will find a B2B selection of insightful articles segmented into Leadership, Tech, Tips and Advice and sector overviews. Should you have any queries about this media release, Topco Media, or participating in the Top 500 publication please contact our national project manager, Emlyn Dunn at: emlyn.dunn@topco.co.za.

87% of executives say reputation is the biggest risk – Here’s how to manage it

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By Prenade Makumborenga, Communications Consultant at Definition  A brand’s reputation is crucial and often the deciding factor between success and failure. A positive reputation attracts new customers and fosters brand loyalty. Conversely, a negative one can drive potential clients away and alienate existing ones. Building a good reputation involves integrating the brand’s image, values, and performance to earn consumer trust, credibility, and loyalty. However, creating a reputation is only half the effort; maintaining it is even more challenging, especially with increasing visibility and scrutiny through social media. So, what is the secret to effective reputation management? This article will explore the best practices for maintaining a solid brand reputation. Understanding the importance of reputation Reputation should be a top priority for all businesses. According to a survey of over 300 executives by Deloitte, 87% of respondents cited reputation as the most significant risk area for companies, and 88% stated that their companies are explicitly focusing on managing reputation risk. The reasons for this are clear. A positive reputation increases customer loyalty, provides a competitive edge, boosts employee retention, reduces marketing expenditure, and strengthens investor and partner relations. A strong reputation can also protect a company during crises. In a world of instant communication through reviews, social media, and news outlets, every company will inevitably face negative feedback at some point. However, by crafting a reputation management strategy and developing reputational resilience, your business can significantly mitigate the impacts of challenges like these. Strategies for maintaining a positive reputation 1. Consistently deliver quality and service Always provide high-quality products and exceptional service to meet and exceed customer expectations. This strategy builds loyalty and a positive reputation, ensuring repeat business and encouraging word-of-mouth recommendations. 2. Build a strong online presence  Establish and maintain a robust presence across various digital platforms to ensure your brand’s story and values are well represented and understood.  3. Engage in social responsibility Participate in corporate social responsibility initiatives to showcase your commitment to societal and environmental issues, which can greatly strengthen stakeholder trust. 4. Maintain a clear brand identity Preserve a clear and authentic brand identity, continuously innovate and ensure that all staff are aligned with the company’s values and mission.  5. Monitor and respond to feedback Actively monitor what is said about your brand and promptly address any concerns or negative feedback to prevent potential damage to your reputation. Effective communication is key, emphasising transparency and timely responses to maintain a positive image. By focusing on brand reputation and developing a thorough branding strategy, businesses can set themselves apart from competitors, enhance customer loyalty, and build a favourable image in the market. 

Let’s debate about BEE – but with respect and nation-building responsibility

By Tshediso Matona (Commissioner: B-BBEE Commission) For me as the Commissioner for Black Economic Empowerment, a positive factor of the current sharp spotlight on BEE is the louder and widening conversation ensuing in the country about BEE policy and legislation.  When BEE and transformation are understood as a tool to correct racial inequality that our economy inherited from apartheid and colonialism, it becomes clear that it is a matter of existential importance which we do need conversation about, because transformation is an ongoing project; a work-in-progress. Equally, it is a matter that deserves to be engaged with respect, integrity and nation-building responsibility, because it is about our painful past and our desired future; as such, our debates must be fruitful and take the country forward. Moreover, whatever US President Trump’s quarrel is with BEE, the events ensuing from it serve to affirm to South Africans that transformation is our domestic, sovereign issue, rooted in our circumstances, and best answered by none other than ourselves. This moment prompts us to recall that it is we, the people of South Africa, black and white, who proclaimed in our Constitution that “We Recognise the injustices of the past” and “Believe that SA belongs to all who live in it” and that we commit to “Heal divisions of the past and establish a society based on social justice”; and to this end to adopt “laws and other measures to advance persons disadvantaged by unfair discrimination”, including the use of preferential procurement. Any ideas that lower the bar of our values and ideals seek to place us in reverse-gear as a country when we ought to be accelerating forward. Ironically, BEE follows in the footsteps of affirmative action, a policy born out of the self-same US. It is based on the principle that to achieve social justice, governments are enjoined to take proactive and targeted measures for the socio-economic upliftment and inclusion of certain population groups, as this would not be achieved by market forces on their own. This is practised in many countries and has evolved into formal global policies, such as Diversity, Equity, and Inclusion, or the Sustainable Development Goals under the UN, and the emerging corporate Environment, Social and Governance standards.  My view is that the newly emerging challenges against BEE, whether emanating within the country or sponsored from outside, are in fact an opportunity for us to deepen and discipline our dialogue about transformation as a nation. In doing so we need to be honest that transformation is an unfinished business, and to find each other about the imperative for changing the status-quo of living with the worst inequality in the world. To this end, the correct place to proceed from is accepting that BEE was created as a tool to solve the inherited problem of a racially skewed ownership, opportunities, and participation in the economy. At the same time, it is acknowledged that BEE as a transformation tool might not be working perfectly, and indeed many shortcomings and loopholes about BEE are being encountered. But this cannot justify this being mischievously exploited by those who now pretend that the problem for which BEE seeks to solve is no longer an issue. Such mischief amounts to a negation of our collective duty to implement the Constitution and correct the economic injustice inherited from our past Read the full story in the 24th edition of Impumelelo: Top Empowerment and find out what the numbers say about transformation in South Africa.