Local companies are expecting the implementation of the revised Codes of Good Practice to result in a decrease in their black economic-empowerment (BEE) scores, a survey by professional services firm KPMG shows.

Seventy-five per cent of respondents to the firm’s 2013 BEE survey, the results of which were released on Thursday, indicated that they expected a decrease in their scores, owing to the implementation of the revised codes, which would result in increased requirements.

“The survey reveals that 81% of respondents have taken measures to prepare for the new codes,” said KPMG BEE advisory director Boitumelo Ngutshane.

The revised codes, which were gazetted in October 2013, were expected to address the shortcomings in BEE compliance and would be effective for all BEE ratings from May 2015.

The revised codes introduce three priority elements – ownership, skills development and supplier and enterprise development.

KPGM pointed out, in response to a question about how companies would fair against the revised codes on the three priority elements, that companies achieved 44% against the target point of ownership, 25% against supplier and enterprise development and 35% against skills development.

“This implies that most companies would be at risk of being discounted a level as the sub-minimum for skills development and supplier and enterprise development are not achieved,” said Ngutshane.

Entities needed to achieve at least 40% of set targets for each of the elements.

Meanwhile, the survey has also shown a year-on-year decrease in the average broad-based BEE score to 52.53 for 2013, compared with 63.95 in 2012.

KPMG stated that the decline could be explained by a few factors.

Firstly, preferential procurement had decreased by 2.79, enterprise development by 2.09 and ownership by 1.98. Management control had also dipped from an average of 4.87 in 2012, to 4.28 in 2013.

Similarly, socioeconomic development fell from 4.92 points in 2012 to 3.75 points in 2013.

“Standardisation of the verification process is important to ensure consistent application and interpretation of the code by verification agents. South African companies must review their transformation strategy if they are to achieve the goals of BEE – the upskilling and employment of black people, and the increased development of and procurement from black businesses,” said Boitumelo.