As shared in our LRN 2025 Ethics and Compliance Program Effectiveness Report, which now in its 11th year includes employee experiences as well as compliance professional respondents, we are now in an ever changing regulatory, political, and social landscape. And while high-impact ethics and compliance (E&C) programs continue to gain ground in the use of benchmarking, emerging risk assessments, and recognizing persistent E&C challenges, a stubborn element still exists: The perception gap, when it comes to values and ethical decision making, between executives and middle/front-line managers, otherwise known as “the leadership divide.”
In fact, as the 2025 report demonstrates, “the gap between executive leadership and middle management has been consistently growing year over year” and 2025 marks “the widest reported disparity to date.” If left unaddressed and unchecked, that divide “can undermine the credibility and functionality of an E&C program.”
What is the leadership divide?
Most organizations have wonderful ethical and purpose-based messages on their websites, often with quotes from CEOs on the organization’s commitment to sustainable business practices. But if those messages are not operationalized, they remain just that, aspirational. And who do people turn to when they face an ethical challenge or dilemma? As the research demonstrates (pioneered by Amy Edmondson in her iconic work The Fearless Organization), it's their supervisors: those are the people who can amplify those thoughtful 'tone at the top’ messages to those who face real-world risks in their work and roles. As shared in the 2025 Report, middle-level managers “serve as a vital bridge to the wider workforce.” They are uniquely qualified to help those on the front-lines to have a balanced mindset between “risk and success” and to close that leadership divide through the “power” of their voices and setting ethical expectations to their teams.
As authored by Brooke Vuckovic in the Harvard Business Review, in an article titled Employees See Middle Managers as an Organization’s Moral Compass, middle managers are those who “push their teams and organizations to seek principled decision making and choose the right thing over what is simply the most expedient.” She adds, “middle level managers have the potential to weave together the moral and ethical fabric of their organizations.”
But if we are not careful, those middle-level managers, who control the volume on “getting the business done” and the importance of “how business gets done” can discard or dilute global aspirational goals and values—not because they are looking to circumvent values and policies, but to meet the needs of business growth. Denise Lee Yohn calls that dynamic, in her book Fusion, the “frozen middle.”
Furthermore, as the 2025 Report states, if there is a misalignment between how executives view their organizations (in terms of ethics and values), juxtaposed against mid-level and front-line managers, that gap can dangerously hamper an organization’s “ability to instill consistent values across the organization.”
How can we bridge this worrisome gap?
Based on our survey data, conversations with clients, and best practices, we have identified several scalable and high-impact solutions and strategies to make sure that “tone at the top” gets amplified and stays aligned with the wider workforce, as it moves through the organizational chart, both internally and externally.
1. It can be as easy as one, two, three.
As shared in a recent Harvard Business Review article, Turn Employee Feedback into Action by Ethan Burris, Benjamin Thomas, Ketaki Sodhi, PhD, & Dawn Klinghoffer, “even if leaders instruct middle managers to take action…they often neglect to follow up on how actions are working and communicate those updates across the organization.” The authors propose a 1-2-3 “rule of thumb” to mitigate this challenge: “Select one topic, do two things about it and check in at least three times on progress.”
The LRN 2025 Report addresses how a lack of ethical role modeling, ineffective communications, and disconnects between stated values and everyday practices can all “be at play” in why ethical frameworks are “not resonating with, or reaching those operating on the ground.” By using surveys and benchmarking (another practice of high-impact programs), leaders have the opportunity to turn that data into actionable mitigation strategies to address leadership gaps, by making sure that those tasks are not “one and done” but are followed up through proactive feedback loops, as in the 1-2-3 process.
You might not like all the feedback you receive via surveys and benchmarking, but bad news can be turned into good news if it helps to reduce a “rosier” view of your organization’s ethical culture than actually exists. Actionable data gives you an opportunity to team with your mid- and front-line managers to mitigate those perception gaps and to re-align values and purpose across the organization.
One of our clients took their survey data and started “ethical dilemma training sessions” with diverse groups so that all participants could better understand the company’s values and effectively model them. In addition, the use of compliance ambassadors continues to be a best practice, where E&C leaders work with different functions and managerial levels to help them to act as ethical motivators and mentors.
By improving communication and transparency via open feedback loops you can ensure that middle managers receive and embrace the same cultural messages as senior leadership, resulting in a cascade of values throughout the organization.
2. Ignore Gen Z at your own risk.
As the 2025 Report shares, “generational differences further complicate the dynamics between leaders and employees,” which can put additional stress on the leadership divide. Going further, the 2025 Report data finds that “less than half of Gen Z workers believe their managers hold themselves to the same standards as others.” While we might think that Gen Z is more committed to ethical work practices than prior generations, “they are less likely to view compliance initiatives as credible or worth their participation.” They are also twice as likely as ‘boomers’ to break the rules to get the job done.”
To mitigate this generational conundrum, “best practices” point to increasing generational training, encouraging leaders to enhance their visibility with the younger workforce and to establish robust feedback mechanisms to ensure that Gen Z employees feel free to “voice their concerns about leadership and ethical practices without fear of retaliation.” In addition, during our client events, we found a large number of E&C leaders inviting Gen Z employees to participate in initiatives including Code of Conduct development, as well as Learning & Education campaigns. They found that by giving Gen Z a voice in programs before they are rolled out, that it resulted in much greater “buy in” by fostering relationships and also demonstrating an appreciation for the resources that are required to have robust programs and campaigns. In other words, get Gen Z involved, and do so early!
3. Think about your Culture with a Big C and a small c.
While we might think of values and ethics as global aspirations, we might not appreciate the role of mid-level managers in not only endorsing those values and codes but in enriching them. As shared in an MIT Sloan Management Review article, Building Culture from the Middle Out, by Spencer Harrison & Kristie Rogers, while we might consider “big-C” as the wider culture, values, and codes that govern an organization, it’s the 'small-c' culture that “describes the qualitative experience of day-to-day patterns of interactions.”
In this “Big and little c context,” mid-level managers are uniquely qualified to link those Big C initiatives to the little c “soil that they are responsible for tending.” In other words, communicate to your mid-level managers that they are not just managers but ethical culture “influencers” who set the tone for their teams.
All of these strategies point to the US DoJ, in its latest release of the “Evaluation of Corporate Compliance Programs," as to the importance of "integrating policies and procedures” as well as rolling them out “in a way that ensures employees’ understanding of the policies.”
As shared by Vuckovic in her article, mid-level managers can be our “unsung heroes who willingly take responsibility for tough decisions, insist on corrections when required, forgiveness where warranted, and act with a sense of duty.” She adds, if properly empowered, your mid-level managers can “display the kind of moral courage, even under pressure, that enriches the lives of employees and organizations.”
We hope that by following and considering these strategies, that you and your teams can take proactive steps to inspire and influence your mid- and front-line managers as to “unfreeze” that middle and let the thaw begin.
