What does SA Inc. score for B-BBEE? Recently, there has been a positive, sweeping global shift from shareholder primacy to stakeholder capitalism. This sees the business sector playing a prominent role in combatting inequality through purposeful inclusivity. In the South African context, Broad-based Black Economic Empowerment (B-BBEE) has long played a pivotal part in fostering greater socio-economic inclusion. But is it a silver bullet for transformation? Or has it lost its way?
The Sanlam Gauge accounts for all elements of Broad-Based Black Economic Empowerment, providing a sectoral score to offer deep insights into how South Africa’s sectors are transforming. It’s a first-of-its-kind consolidated research report intended to spark debate and give actionable insights.
Sanlam’s purpose, to empower people to ‘Live with Confidence’, encapsulates the notion of purposeful action. By leveraging opportunities to improve financial literacy, it instils positive financial confidence to galvanise more people to actively participate in the economy. Its mission is now to bring confidence back to the transformation space.
Karl Socikwa, Group Executive for Sanlam’s Group Market Development, says, “Transformation is about deliberate inclusion. We need to fundamentally change the transformation narrative. Globally, we’re falling short. That became abundantly clear with the sweeping Black Lives Matter movement last year. As a brand that seeks to enable successive generations to live securely and prosperously, we take our position of influence very seriously. We know true inclusion goes beyond access to banking and credit. It’s about ensuring the previously marginalised have access to well-functioning financial infrastructure – and the confidence to manage their money.
“Covid-19 highlighted the urgent need for companies to play a more meaningful role in the societies and communities they serve. This means doing the hard work of intimately understanding those communities in order to know what to do to achieve meaningful inclusion. It means asking ourselves collectively how we can move to a space of deliberately designed inclusion. This is the only way to combat the inequality stifling growth. We have to move beyond systemic bias if we are ever to unlock this nation’s potential.”
Sanlam’s transformation journey
Empowerment has been at Sanlam’s heart for over 100 years. The focus for empowerment has shifted over the last century and now is aimed at addressing the entire demographic of the communities in the geographies it operates in. More recently, in the late twentieth and early twenty-first century, the Group’s commitment to furthering financial inclusion has seen it pioneer some of South Africa’s biggest, most ground-breaking B-BBEE deals. The Sanlam Gauge is a natural extension of this journey.
Sanlam established one of the most influential B-BBEE partnerships when it sold a stake in the company to Ubuntu-Botho (UB), a group of black investors led by Dr Patrice Motsepe. The partnership between Sanlam and UB has been one of the most successful empowerment partnerships in South Africa, creating value of over R14 billion for broad-based black shareholders when the first 10-year transaction matured.
The Group’s B-BBEE journey began when Sanlam pioneered South Africa’s first-ever major BEE deal in 1993, when it sold its controlling stake in Metropolitan Life to Methold. This led to the formation of New Africa Investment – the first major black-controlled company to list on the JSE.
In 2020, ARC acquired 25% of Sanlam’s third-party asset management business and, as a result, Sanlam Investments is the largest black-owned asset manager in South Africa. Sanlam Group acquired 25% of ARC FS and this will enable further strategic alignment in the corporate benefits and health insurance segments.
Furthermore, Sanlam has invested R630 million in communities over the past ten years.
Socikwa concludes, “For us, deliberate action means getting more people into the mainstream economy, empowering families to have the confidence to manage their money, diversifying our workforce to align with the varied markets we serve, including more people that were historically outside the boardroom into decision-making, and incorporating more local partners in our ecosystems to prompt growth and job creation.
“The Sanlam Group has been a level one B-BBEE business for a number of years now and a certified Top Employer for six consecutive years. Our transformation drive has always been purpose-led, with an ongoing mission to create shared value for all our stakeholders, including black shareholders.
“We know deliberate action is the only way to achieve true results. The Sanlam Gauge is a way to take stock of progress and to encourage dialogue on how to affect true transformation, to the benefit of all South Africans.”