5 BEE trends transforming South Africa

Institutions, including the Gordon Institute of Business Science, have introduced specialised ESOP courses, further highlighting the growing impact of these structures in corporate South Africa.

ESOPs offer a win-win solution for both companies and employees, delivering benefits including compliance, trust, loyalty, and measurable business outcomes. Going forward, they will become the benchmark for sustainable transformation.

2. The beginning of the end for legal grey areas

For too long, companies have exploited loopholes in BEE legislation. The landmark recent Dimension Data court case marks a significant turning point. While the company should be commended for tackling the matter head-on, the case does provide the first judicial guidance on how to navigate these loopholes in the future.

One such loophole is en commandite partnerships, where advisors implement schemes with the original shareholder acting as the “partner”. These structures skirt being technically compliant but do not typically lend themselves to substantive ownership transfer or genuine empowerment, and, as the court said, can undermine transformation.

The legal clarity provided by this recent case removes the grey areas. It also means that multinationals and large firms cannot simply rely on advice from their advisors. Critical questions such as “Is this structure too good to be true?” and “Does it genuinely advance transformation?” will have to be asked so that compliance efforts align with the letter and spirit of BEE.

3. Executive incentive schemes as transformation tools

Executive incentive schemes are emerging as powerful tools for driving transformation and attracting top talent. These kinds of schemes are designed to comply with BEE requirements and drive performance, build trust, and secure long-term commitment from executives.

As a result, companies that balance their transformation objectives with strategic talent management are more successful. One notable example is the Coronation Fund Managers transformation strategy, which at the core, is about employee empowerment. In 2005, Coronation launched the first employee-only empowerment transaction in South Africa through the sale of 10% of its business to The Imvula Trust. Today, this has increased to over 20% employee ownership.

As South Africa navigates global economic shifts and domestic challenges, well-structured incentive schemes will increasingly play a role in developing strong leadership structures that can advance transformation, navigate risk, and drive growth.

4. AI and technology empowering Black businesses

The rise of artificial intelligence (AI) and other advanced technologies is already opening up new opportunities for Black-owned businesses. As these tools advance and businesses start to integrate them more strategically, we’ll see them used more to help Black entrepreneurs find untapped markets, optimise their supply chains, and predict customer behaviour more accurately. Organisations in this space such as Lean Technovations help businesses attain efficiency and sustainable growth through an AI-enabled system transformation approach.

AI and technology have the power to level the playing field, providing access to funding, training, and mentorship. They’re also connecting smaller businesses with larger networks of suppliers, customers, and investors.

Making this technology more accessible will unlock profitability and growth for Black entrepreneurs, but it needs to go hand in hand with skills development and the rollout of broadband internet to have real, transformative impact in the future.

5. Changes in the trade environment

Trade dynamics, including incoming US President Donald Trump’s proposed trade tariffs, are going to cause some global shifts that South Africa will not escape over the next few years. To navigate these waters, the Department of Trade, Industry, and Competition (DTIC) will need to position the country as an attractive investment destination. Doing this will mean reducing the red tape that continues to hamper investment, and balancing our transformation goals with investment-friendly policies.

The Minister of DTIC Parks Tau has signalled a more pragmatic approach to ownership requirements in certain sectors. By creating an environment that encourages compliance and economic growth, this strategy has the potential to reshape South Africa’s investment landscape, while advancing sustainable transformation.

Black Economic Empowerment in South Africa is moving beyond being a compliance exercise to becoming a driver of business success and social impact. Companies that want to curate fairer and more sustainable futures for themselves, will need to balance good governance with genuine transformation outcomes in 2025 and beyond.

About the Author

Bruce Hunt is the managing director at Transcend Capital. He has 18 years of experience in structuring multinational BEE transactions, including Employee Ownership, Broad Based Schemes and introducing strategic investors. He also advises on the Public Interest elements of Competition Commission approval.

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