LRN Research Highlights Key Gaps and Opportunities in Global Ethics & Compliance Programs
LRN Corporation, a leading provider of ethics and compliance solutions, has unveiled its much-anticipated 2025 Ethics & Compliance Program Effectiveness Report, titled Caught in the Middle. This comprehensive report presents key insights into the widening performance disparities among ethics and compliance (E&C) programs, highlights generational divides in workplace ethics, and examines emerging risks such as artificial intelligence and global supply chain compliance. These findings underscore the evolving landscape of E&C programs worldwide and the need for organizations to adapt proactively to these changes.
Ethics & Compliance Programs: A Pillar of Organizational Resilience
Ethics and compliance programs play an increasingly critical role in fostering organizational resilience, building trust, and ensuring regulatory adherence. According to Kevin Michielsen, CEO of LRN Corporation, the latest research serves as a crucial indicator of both progress and persistent challenges within corporate ethics frameworks.
Ethics & compliance programs have never been more critical to organizational resilience and trust,” said Michielsen. “This research shines a light on where organizations excel and where they must improve to meet the demands of a complex regulatory environment and an evolving workforce.”
The 2025 report presents a compelling case for organizations to prioritize ethics and compliance measures as integral components of their business strategy. The findings reveal key gaps that could hinder program effectiveness and highlight opportunities for leaders to drive meaningful improvements in their ethical cultures.
Key Findings: Major Gaps in E&C Programs
The report identifies critical areas where E&C programs are falling short and provides insights into how high-performing organizations are addressing these challenges. Some of the most striking gaps include:
1. Widening Resource Disparities
One of the most significant findings in the 2025 report is the growing performance gap between high-impact and medium-impact E&C programs. Organizations with high-impact programs are leveraging advanced tools, analytics, and benchmarking capabilities nearly twice as effectively as their medium-impact counterparts. This disparity is driving a clear division in performance, with companies that invest in sophisticated E&C mechanisms gaining a competitive edge in compliance effectiveness.
The report underscores that organizations failing to prioritize these tools risk falling behind in regulatory adherence, ethical business practices, and overall organizational integrity.
2. Leadership Perception vs. Employee Reality
A major concern highlighted in Caught in the Middle is the disconnect between executive leadership and employees regarding perceptions of ethical culture within organizations. The research shows that while 79% of executives believe that middle managers consistently make decisions aligned with company values, only 37% of employees share the same sentiment.
This gap suggests that employees may not be experiencing the ethical standards that leadership assumes are in place. Such misalignment can lead to disengagement, distrust, and compliance blind spots that put organizations at risk. Closing this perception gap requires increased transparency, enhanced communication, and a stronger emphasis on middle management training.
3. Emerging Risks Remain Largely Unaddressed
With the rise of artificial intelligence (AI) and increasing complexities in global supply chain compliance, organizations must proactively adopt new compliance measures to mitigate potential risks. However, the report finds that many organizations—particularly those with medium-impact E&C programs—are lagging by as much as 2.3 times in adopting compliance strategies for these emerging threats.
AI-driven decision-making introduces ethical dilemmas around bias, data privacy, and accountability, requiring urgent attention from compliance professionals. Similarly, global supply chain vulnerabilities expose businesses to risks related to regulatory non-compliance, environmental concerns, and human rights violations. To remain resilient, companies must integrate comprehensive compliance strategies tailored to these evolving challenges.
4. Generational Challenges in Ethics & Compliance
Another key finding of the report is the growing generational divide in perceptions of workplace ethics. Gen Z employees—who represent the fastest-growing segment of the workforce—are twice as likely as older generations to express skepticism about managerial fairness. This generational shift signals a need for organizations to develop targeted strategies that engage younger employees and foster trust in leadership.
To address this challenge, organizations must adopt modern training programs, enhance transparency, and create more inclusive decision-making processes that reflect the values and expectations of younger employees. Failure to do so could result in disengagement and ethical concerns that could damage corporate reputation and employee retention rates.
Bridging the Gap: A Call to Action for C-Suite Leaders
The findings of Caught in the Middle serve as a wake-up call for corporate leaders, emphasizing the urgent need to bridge the gap between E&C strategy and execution. Ty Francis, MBE, Chief Advisory Officer at LRN Corporation, stresses the importance of transparency, accountability, and proactive risk management in strengthening compliance programs.
The report serves as a wake-up call for C-suite leaders to bridge the gap between strategy and execution,” said Francis. “By focusing on transparency, accountability, and proactive risk management, organizations can transform compliance into a strategic advantage. This new and updated research is a direct juxtaposition of employee experiences with those of compliance professionals, providing a much deeper understanding of the alignment, or gaps, in perceptions of program effectiveness.”
Organizations that take a proactive approach to ethics and compliance—through continuous improvement, collaboration, and innovation—will be best positioned to thrive in today’s complex regulatory landscape. The report provides a roadmap for companies to enhance their programs, align leadership with employee experiences, and implement robust mechanisms to mitigate emerging risks.
The Path Forward: Strengthening Ethical Cultures in Business
As businesses navigate the challenges outlined in the report, they must prioritize the following action steps to strengthen their ethics and compliance programs:
- Invest in Advanced Tools & Analytics: High-impact E&C programs leverage data-driven insights to improve compliance effectiveness. Companies should invest in AI-driven analytics, automated compliance monitoring, and benchmarking tools to stay ahead.
- Close the Leadership-Employee Perception Gap: Organizations must foster a culture of open communication and ethical leadership, ensuring that middle managers are adequately trained and aligned with corporate values.
- Proactively Address Emerging Risks: Businesses must incorporate compliance strategies that account for AI governance, data privacy regulations, and supply chain transparency to prevent regulatory breaches and ethical dilemmas.
- Engage Gen Z Employees: Tailored ethics training programs and inclusive decision-making processes can help organizations build trust with younger employees and align compliance efforts with evolving workplace expectations.
The 2025 Ethics & Compliance Program Effectiveness Report underscores the growing importance of ethical leadership, strategic compliance initiatives, and the need for continuous adaptation in today’s rapidly changing business environment. By addressing the key gaps identified in this research, organizations can strengthen their ethical foundations, enhance employee trust, and gain a strategic advantage in compliance effectiveness.
