Black South African shareholders owned 27% of life offices that are members of the ASISA in 2023, exceeding the 25% net value target of the B-BBEE ownership scorecard for the first time. Picture: Supplied
The Broad-Based Black Economic Empowerment (B-BBEE) ownership scorecard has exceeded the 25% net value target for the first time in 2023.
The Association for Savings and Investment South Africa (ASISA) yesterday said this reflected progress made by black South African shareholders, who owned 27% of life offices that are ASISA members.
The net value target pertains specifically to black shareholders’ unencumbered (debt-free) shareholding, making it an indicator of ownership within the B-BBEE scorecard.
In 2018, unencumbered Black ownership of life offices was only 14%, showcasing a turnaround in the industry’s commitment to transformation.
Kaizer Moyane, CEO of ASISA, yesterday lauded this progress as not insignificant, particularly against the backdrop of a struggling economy.
He noted that while the 2023 figures indicate an upward trend across various elements of the Financial Sector Code (FSC) scorecard, the ownership dimension stands out as the area with the most significant advancements.
“Life offices and asset managers not only met but exceeded all B-BBEE ownership targets in 2023,” Moyane said.
This transformation is not limited to ownership; ASISA members have also recognised the critical role of Enterprise and Supplier Development (ESD) in stimulating economic growth.
Collectively, they supported small, medium and micro enterprises (SMMEs) with loans, investments, and grants totalling an average of R772 million annually over the past six years.
In tandem, socio-economic development initiatives garnered R2.4 billion in funding between 2018 and 2023, with R644m earmarked for consumer financial education—an essential enabler for long-term sustainability in the sector.
The latest update from ASISA, released this week, provides a comprehensive overview of the collective transformation progress since the Amended Financial Sector Code took effect on 1 December 2017.
The data, reflecting responses from members representing 98% of assets under management (AUM) for life offices and 87% for asset managers, highlights that Black shareholders owned 38% of asset managers in 2023.
Notably, asset managers had already reached the 25% net value target back in 2020, with unencumbered Black ownership measured at 22% in 2018.
Despite the encouraging progress, Moyane emphasised the importance of continuing to strive for improvement.
“While the 2024 Transformation Report demonstrates consistent progress over the past six years, we must also acknowledge the ongoing challenges. Our industry does not yet fully reflect the demographics of the people it serves, but our members are fully committed to transformation,” he said.
Lister Saungweme, ASISA’s senior policy advisor for transformation, skills development, and education, reflected on the disparities in representation within executive roles.
Despite the overarching growth in black ownership, the representation of black individuals in executive director roles has not kept pace with ownership changes.
“This trend is evident in both life companies and asset managers,” she said,
Saungweme also announced that there has been notable growth in the number of executive management positions held by black individuals over the past six years.
For life companies, representation in executive management grew from 29% in 2018 to 46% in 2023, albeit with a target of 60%. Additionally, the proportion of black women in executive positions more than doubled, rising from 8% to 22% during the same period.
Within asset management, black executive representation similarly increased from 39% in 2018 to 59% in 2023, nearing yet another target of 60%. The number of black female executives in this realm rose from 15% to 26% against a target of 30%.
While there has been some decline in black representation within junior management tiers among asset managers, the upward trend in black professionals achieving middle management positions was encouraging.
This reflected a pipeline and increased investment in skills development, underpinned by a total expenditure of R12bn by life companies and asset managers over the past six years, highlighting a comprehensive commitment to workforce development.
Saungweme said the 2024 Transformation Report was the industry’s most representative progress overview to date.
The ASISA Board commissioned this research to provide clarity and guidance for members, urging individual companies to utilise the results as benchmarks for their own progress, and to take necessary corrective action to ensure sustained momentum towards transformation.
BUSINESS REPORT