COLIN REDDY: Pivoting to inclusive employee and manager ownership is urgent

SA’s broad-based BEE programme has long been a cornerstone policy aimed at addressing the deep economic injustices left by apartheid. Yet, decades later it is evident that while BEE has opened doors for some, it has largely benefited a small elite, leaving the vast majority of employees and managers excluded from meaningful ownership and economic power. 

The solution is not to abandon BEE, but to reform it, anchoring it in a broader African shift from passive wealth ownership by a few to active ownership by those who manage and operate enterprises. This is Africa’s opportunity: to redefine economic empowerment not as the acquisition of shares by elites, but as the direct participation of managers and employees in the control, governance and value creation of firms. This is a critical step toward realising inclusive economic democracy — and, ultimately, a deeper and more durable political democracy. 

Where broad-based BEE has been somewhat successful is in integrating skilled black professionals into formal employment, often within established corporate hierarchies. While this has improved representation in boardrooms, it has not fundamentally transformed who holds power in the economy or how wealth is created and distributed. Shareholding in these contexts is often passive, granting nominal ownership without real influence, and failing to include the people who drive the day-to-day running of businesses. 

This is why pivoting to inclusive employee and managerial ownership is urgent. Empowerment is no longer about symbolic inclusion but about transforming economic structures from within when those who operate and manage firms are also their owners. Active ownership enables the people who understand the business to direct its strategy and share in its value.

Enterprises owned by their employees and managers foster more inclusive decision-making, greater commitment and innovation from within. These are not abstract ideals — they translate into more resilient businesses and broader economic participation at both community and sectoral levels. 

Inclusive ownership also has a strong track record of supporting job stability and firm longevity. Unlike traditional shareholder-driven firms focused on short-term returns, employee-owners and managerial co-owners are more likely to prioritise sustainable practices and long-term success. They are more inclined to preserve jobs and reinvest in their organisations. Firms often seek adaptive solutions when economic pressures arise rather than defaulting to layoffs. This resilience benefits the enterprise and the communities in which they are embedded. 

While BEE has helped cultivate a black capitalist class, it has done little to democratise economic power. Critics who argue that black ownership has already been achieved often overlook the passive nature of much of that ownership, where control is distant from those who operate the business. Inclusive enterprise ownership, by contrast, is participatory and grounded. It distributes power and wealth to those engaged in everyday operations, not just to financial stakeholders. 

Importantly, such ownership need not be race-based. While the legacy of apartheid demands that redress for racial inequality remain central, enterprise ownership by managers and employees can be inclusive of all who have been economically marginalised. It fosters solidarity across racial and class lines, enabling shared prosperity while addressing historical injustice. 

Some may question whether employee and managerial ownership models are feasible or scalable. Yet global examples — from Spain’s Mondragon co-operatives to employee stock ownership plans in the US — demonstrate their viability. SA has successful cases of employee-owned businesses proving these models can compete and thrive. When those who operate a business own a stake in it they are more motivated, productive and aligned with its long-term interests. 

A key challenge in SA’s dynamic economy is mobility — how can ownership work if people change jobs frequently? Fortunately, portable ownership structures offer an answer. Sector-level co-operatives, pooled shareholding schemes and pension-linked ownership funds can allow employees and managers to retain their equity stake even as they move across firms. This ensures continuity in economic participation without locking people into single employers. 

Concerns about affordability can also be addressed. Governments, development finance institutions and the private sector can offer low-interest loans or grants to finance ownership by managers and employees, with repayment structured through dividends or modest payroll deductions. So-called “sweat equity” models — where shares are earned over time — can democratise access to ownership without placing an immediate financial burden on participants. 

Beyond economic reform, this transformation is vital to SA’s political future. Concentrated economic ownership often translates into concentrated political power, undermining democracy and fuelling corruption. Economic democracy — grounded in shared ownership among those who operate the economy — can lay the foundation for genuine political equality. Ownership brings income, dignity, voice and the capacity for meaningful civic engagement. 

Reforming broad-based BEE to embed ownership by managers and employees — through sustainable financing and enabling legal frameworks — is not merely a policy revision; it is a re-orientation of economic justice itself. It allows SA, and Africa more broadly, to move beyond extractive, passive models of wealth accumulation toward participatory, generative and democratic enterprise. 

The continent’s future depends on building economies where those who create value share in its fruits, not as outsiders but as owners. SA now has a chance to lead that shift. 

• Reddy is an associate professor of sustainability in the department of business management, College of Business and Economics, at the University of Johannesburg.