The Value of Business Ethics for APEC SMEs

Previous research has demonstrated a link between financial performance and robust ethics and compliance programs for large enterprises around the world. Based on that knowledge, this research sought to determine whether or not the same would be true for small and medium enterprises (SMEs) in the APEC region’s biopharmaceutical, medical technology, and similar health-related sectors. Were health SMEs with more mature compliance and antibribery controls more resilient and economically successful in weathering the pandemic? To find out, a research team surveyed small and midsized companies in the health-related industries throughout APEC economies. These companies completed a self-assessment questionnaire about their own compliance maturity, as well as their economic performance since 1 January 2019. The assessment focused on anti-corruption and conflict of interest within the broader ethics and compliance area. On a range of economic indicators, the hypothesis is decidedly confirmed: health-related SMEs with a high or medium ethics program maturity had stronger economic performance during the COVID pandemic. They were more likely to grow revenues, add employees, increase employee wages, as well as grow revenue from international customers and expand their businesses into new markets. Equally impactful, the analysis also showed that although the average maturity was higher for companies with over 100 employees, even SMEs under that size can develop medium maturity programs and experience similar economic benefits.