Companies in some developing countries, such as those in the Middle East and North Africa region, do
not place high importance on ethical behavior and practices within the organization. The aim of this
study is to examine the effects of ethical behavior and practices within small and medium size
enterprises (SMEs) in developing countries on promoting good corporate governance. Data collected
in Lebanon and Egypt provided evidence that ethics impact all major corporate governance categories.
A deeper analysis of the relationships enabled the profiling of SMEs with lower levels of corporate
governance relative to Ownership Structure. The findings created a path for useful recommendations
to enhance corporate governance, in particular the Ownership Structure category, through adopting
expedient ethical practices.