B-BBEE Fronting Indicators: Are you committing fraud?
Fronting is a form of fraudulent misrepresentation in an attempt to circumvent the BEE codes. There are various forms of fronting indicators listed in legislation. In consulting, we have come across some glaring examples which we would like to point out:
- The black people identified by an enterprise as its shareholders, executives or management are unaware or uncertain of their role within the enterprise.
- The black people identified by an enterprise as its shareholders, executives or management have roles of responsibility that differ significantly from those of their non-black peers.
- The black people who serve in executive or management positions in an enterprise are paid significantly lower than the market norm, unless all executives or management of this enterprise are paid at a similar level.