This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our PRIVACY POLICY for more information on the cookies we use and how to delete or block them.
  • B-BBEE is not compulsory, unless …..
Articles:

B-BBEE is not compulsory, unless …..

13 March 2019

B-BBEE compliance for companies is not a legislative requirement. Companies are not required to disclose their B-BBEE status or verify their status. It is seen as business requirement.

However, the B-BBEE Act requires that all JSE listed entities must submit a compliance report on the status of their B-BBEE, on an annual basis, within the prescribed time frames and in the prescribed format. This means that compliance with the B-BBEE act is compulsory for such entities. Indeed, section 13G (2) requires a JSE listed entity to undergo a B-BBEE verification by a SANAS accredited verification agency and to disclose the contents of such a verification on the prescribed form to the BEE Commission. Failure to do so would constitute an offence in terms of the B-BBEE Act.

Directors of a JSE listed entity have a fiduciary duty to ensure that a company satisfies all legislative requirements imposed on it. It therefore means that a director of a JSE listed entity must ensure that the provisions of the B-BBEE Act related to reporting have been satisfied.

An auditor has a duty to report on irregularities discovered during an audit of a JSE listed entity. One such irregularity an auditor must report on is a material breach of a director’s fiduciary duty in terms of meeting the provisions of the B-BBEE Act that is applicable to a JSE listed entity.

An auditor is also obligated to ensure that the directors of a JSE listed entity are complying with their fiduciary duties. Measures should therefore be put in place to ensure that the necessary audit checks are carried out to ensure that a director’s fiduciary duty to comply with the provisions of the B-BBEE Act have been met.

Read more BDO Insights