NPI Governance Consulting CEO, Israel Noko, spent the day in parliament yesterday delivering a paper on transformation in the financial services sector as part of the first day of the public hearings on the transformation of the financial sector. The Standing Committee on Finance has agreed upon the seriousness in which radical transformation affects them in retrospect, but that by their own admission, it cannot be at the detriment of the economy as banks and financial services play a major role.
Transformation has gone through three phases and now is in its 4th phase, with the gazetting of the Amended BEE Codes. Herein lies an opportunity to make the FSC (Financial Services Charter) more meaningful. Issues that would be raised in the committee include, how far the Financial Sector Charter has been implemented and reviewed, the banks’ reluctance to fund small businesses and lack of access for historically disadvantaged South Africans.
Over 95% of the industry player base is comprised of small businesses that have an annual turno
ver of under R10 million and therefore, by default, are deemed to be a Level 4 BEE Contributor. A consideration of these facts by the Financial Sector Charter is in direct correlation with their commitment to transforming the industry.
“Transformation in the financial services sector has, until recently, followed a rather slow but interesting route. The signing of the Financial Sector Charter, however, means that an entirely new and exciting journey h
as begun. Having embarked on this journey, we need to maintain our momentum and ensure that we keep on track so that we can reap great rewards for the industry” –Israel Noko, NPI Governance Consulting CEO.
Companies in the financial services industry have acknowledged that the drivers for implementation to date have been a mixture between scoring points and addressing transformation in the workplace. With specialised skills shortages in financial services and the unsustainability of a point-scoring-strategy, this phase of BEE is indeed a long overdue exercise and that which needs to be viewed with foresight and as an imperative beyond compliance.
It is time for commerce to face some uncomfortable facts. Like the fact that many companies are not doing enough to combat fronting practices and “grass rooting BEE” at community level. This was further purported by the Chairperson of the Standing Committee on Finance yesterday when he said that, “it is not as if you can make an immediate demand overnight for an overhaul of banks. The financial sector is a crucial part of the economy. We cannot adopt a reckless populist approach that undermines the interests of the country, particularly the poor and disadvantaged.”
Where there is a legal or practical “impossibility” to comply with a measurement category or element and such legal or practical impossibility is validated (to set definition and criteria), then NPI Governance Consulting will welcome the opportunity to engage with Government to resolve such issues. B-BBEE requires that we all adopt a cool head and more importantly to work together in planning for the strategic approaches that will balance the probabilities that may very likely ensue, given the extremities of external influences and circumstances from one industry to another.
NPI acknowledges that Transformation in the financial services sector is a fact. The charter is the visible manifestation of the industry’s resolve to play a leading role in transforming the economy and empowering all South Africans.The journey towards a more equitable sector has begun in earnest and none of us can afford to be left behind. One of the ways that NPI Governance Consulting has demonstrated this is through the development of a free B-BBEE calculator that will be going out into market in April 2017.
Israel Noko, NPI CEO Current Directorships & Committee Memberships
- BankSETA (Non-Executive Director)
- Hydro Power Equipment (Pty) Ltd (Non-Executive Director)
- Micro Finance South Africa (MFSA) (Non-Executive Director)
- Inyathelo: The South African Institute for Advancement (Trustee)
- Atlas Finance (Chairperson of Social & Ethic Committee)
- WorleyParson Employee Share Trust Chairman
- Khetimplio Aid for life Trustee
For further information, contact:
Thato Malebane, Marketing & Communications Manager
Tel: (+27) 011 259 4018