The Value of Business Ethics for SMEs during COVID-19
Drawing on the findings of a recent report launched under the Business Ethics for APEC SMEs Initiative, Thomas Cueni of the International Federation of Pharmaceutical Manufacturers & Associations (IFPMA) outlines the benefits for small and medium-sized enterprises (SMEs) of adopting ethical practices.
Cueni highlights some of the key trends that emerged from report, conducted by Ethisphere, and why “in times of uncertainty, integrity becomes a differentiator.”
The disruptions caused by COVID-19 have heightened the risk of unethical behavior in different sectors, including in healthcare, where trust is our lifeblood. We’ve seen an outbreak of misinformation during the pandemic, ranging from fake cures, false claims, and harmful health advice. We’ve seen bad-acting opportunists take advantage to trade illegitimate or non-compliant products.
The negative effects of breaking this trust on business performance have been well documented. Yet the positive impact of establishing and nurturing it has so far been taken for granted.
There is a strong need to evidence the why: why should a company, particularly a small or medium-sized enterprise (SME), care about adopting and implementing high standards of ethical conduct. Is there anything to gain?
This is the question that the Business Ethics for APEC SMEs Initiative sought to answer. The initiative is the world’s largest public-private, multi-sectoral partnership to advance business ethics in the biopharmaceutical and medical device sectors, which is overseen by the U.S. Department of Commerce. I am proud to be associated with this initiative as the Industry Co-Chair of the APEC Biopharmaceutical Working Group on Ethics. Over the past decade, this group has enabled remarkable progress across the entire APEC region through promoting the role of ethical business practices to strengthen economies, businesses, health systems, and innovation, through a wide endorsement of the APEC Principles.
Through 2021, the initiative commissioned Ethisphere and the University of London Royal Holloway to undertake novel research across the APEC region with the hypothesis that health-related SMEs with a mature approach to ethics have outperformed economically amidst the COVID-19 pandemic. I was pleased to see this important body of work come to life, co-funded by APEC and IFPMA, in the context of APEC’s new Vision 2025 roadmap, as it seeks to send a strong message to businesses everywhere.
With its recent report launch, the research broke new ground in measuring the positive return on ethics. Over 200 SMEs from 18 different economies spanning the Asia-Pacific and Americas were assessed, demonstrating they were more likely to grow revenues, add employees, increase wages, and expand international customers. Importantly, positive economic outcomes were not limited to only the highest-maturity SMEs. This means that there are also clear benefits in bringing the least-mature SMEs, economies, and sectors of the industry up to modest standards. A rising tide of ethical conduct can truly lift all boats.
A second trend unearthed by the research showed that even the smallest healthcare companies are capable of building and benefitting from more mature ethics and compliance programs. The potential for such firms, many with less than 10 employees, to elevate their programs is significant and can help spread awareness among peer companies or across the value chain.
Finally, the research showed that, among those companies dedicating further resources to ethics since the pandemic, it was not government regulations that catalyzed their decision to do so, but an increased focus on ethics from the industry and society. This resonates with our core mission at IFPMA, which is to help advance ethical business practices that strengthen the pharmaceutical and health-related sectors around the globe.
In times of uncertainty, integrity becomes a differentiator. Frontrunners in integrity will distinguish themselves as never before. The Ethisphere and University of London Royal Holloway research through APEC helps underscore the positive impact of embracing ethical conduct on business performance – with a focus on the Asia-Pacific and Americas, but whose learnings can certainly be extrapolated for worldwide benefit. It shows that companies are putting greater attention on adopting ethics programs, adding them into a broader environmental, social, and governance framework. I can only hope that it builds a solid foundation for future research, fostering a better understanding that trust is vital to innovation and delivery of health technologies across the globe.
This piece appeared first on PharmaBoardroom.