The simplest way to define what BEE Verification is and how it works is that Black Economic Empowerment (BEE) verification is an independent and in-depth assurance process that seeks to verify the "Broad-Based BEE" (B-BBEE) status of closed corporations, companies and other economic entities.

The reason why it is referred to as “Broad Based” B-BBEE is because the verification process measures the participation and benefits accrued to black people considering a broad base of criteria. The term “black people” in this context includes African, Coloured, Chinese and Indian People.

Through the verification process the measured entity or client will have to demonstrate their compliance with the BBEE Act as well as the B-BBEE Codes of Good Practice.

The criteria or measurable elements include seven main aspects which include the interest of black people by having ownership in the business, the participation of black people in the strategic management of the business, Employment Equity and the participation of black people employed in other levels within an organization.

Then there is the measurement of the contribution the business makes to skills development of its black employees. Preferential Procurement looks to which extent procures new staff members in relation to B-BBEE compliant entities.

The last two main measurable include Enterprise Development through which the evaluation looks at the contributions made by the business to the development of black empowered or owned businesses and Socio Economic Development related to how the business facilitates access to the economy from black people.

The BBEE evaluation of measurement against the criteria works through a scorecard and codes categorize businesses into three types depending on their size. Micro Enterprises with an annual turnover below 5 million Rand per annum are exempt from having to comply and just need to prove such turnover. EME’s automatically get a Level 4 B-BBEE status and if they happen to be black owned, they are promoted to Level 3 status.

QSE’s (Qualifying Small Enterprises) are businesses who generate an annual turnover of between 5 million and 35 million Rand. QSE’s do have to comply with a QSE scorecard. This scorecard requires that the business selects four of the seven required measurement criteria; with each element rating out of 25 points to make up 100.

Large Enterprises have annual turnovers in excess of 35 million Rand and they have to comply with a full scorecard related to all seven required measurement criteria.