Black managed is not black owned.

Earlier this year, the outrage of thousands of minority-owned companies was ignited by news of a National Minority Supplier Development Council proposal to reduce to less than 51% the threshold of ownership necessary for an enterprise to qualify as minority owned. The NMSDC'S position is that it will make it easier for major corporations many of whom are represented on the Council's 80-member board, to meet their minority vending objectives by creating companies large enough (thanks to equity investments from non-minority capital sources) to do business in an era of consolidated supplier ranks and bundled contracts. Their "logic": the best way for black-owned businesses to grow is to not be too black. The unintended result will be to give pseudo minority-owned companies an unfair advantage over truly black-owned firms in the competition for lucrative corporate contracts.

One needs only to recall the scandal of "front" companies qualifying for U.S. Small Business Administration 8(a) contracts in the 1980s to see how easily a weakening of standards can serve to undermine the integrity of efforts to aid in the growth and development of black-owned companies. We do not need to return to the days when all a white company had to do to qualify as a minority company was to hire a minority executive as president and give him or her a token (both senses of the word) stake in the business.

I have no objection to the idea of businesses managed, but not owned, by African Americans, nor to firms in which African Americans have a less-than-majority stake. We've featured many businesses of both types, including Ben & Jerry's Homemade Inc. (which hired an African American, Robert Holland, for a stint as CEO in 1994) and QDE (the television/film company co-owned by entertainment mogul Quincy Jones and David Saltzman, in a joint venture with Time Warner), in the pages of BLACK ENTERPRISE.

However, there is a difference between an owner and a manager with an equity stake in his or her employer. Top managers--including chairmen, presidents and CEOs--get forced out of companies, both public and private, every year. It is not unusual for such executives to have had a significant equity stake in the company that ousted them. Even a successful 50-50 partnership does not necessarily satisfy the definition of ownership as measured by who has controlling interest in a venture. And it's the issue of control that is the very foundation of the uniquely American dream of entrepreneurship.

Adoption of the NMSDC proposal would be a disaster for black business development because it blurs the line between owning a company and merely having an ownership stake in it. Thus, it would destroy the fundament of power in the global capitalist system: owners call the shots. As we carry our struggle for economic advancement into a new millennium, anything that would loosen our grasp of this basic reality is a grave threat to not only the continued long-term growth of black business, but our very ability to survive and compete in the global marketplace.

The above position was expressed in a letter to the op-ed pages of the nation's daily newspapers and other media outlets by NAACP President and CEO Kweisi Mfume, National Urban League President and CEO Hugh B. Price, National Council of Negro Women Chair Dorothy L Height, National Action Network President Rev. Al Sharpton, Essence Communications Publisher and CEO Edward Lewis and Earl G. Graves.