Ethical AI and Corporate Governance: Exploring the Social Implications of AI-Driven Decision-Making in Business

Abstract

Artificial Intelligence (AI) is increasingly transforming organisational decision-making processes across finance, human resource management, marketing, risk assessment, and strategic planning. While AI-driven systems offer significant benefits in terms of efficiency, accuracy, and predictive capabilities, they simultaneously raise critical ethical and governance concerns related to transparency, accountability, fairness, privacy, and stakeholder trust. As organisations increasingly rely on algorithmic decision-making, traditional corporate governance frameworks face new challenges in ensuring the responsible and socially acceptable deployment of AI. This study systematically reviews the emerging literature on Ethical AI and Corporate Governance to examine the social implications of AI-driven decision-making in business organisations. Using a systematic literature review methodology, relevant studies published between 2018 and 2025 were identified through Scopus, Web of Science, Google Scholar, Emerald Insight, and ScienceDirect databases. Following a structured screening and selection process, 68 peer-reviewed publications and policy reports were analysed using thematic analysis. The review identifies six major themes: algorithmic bias and discrimination, transparency and explainability, accountability and responsibility, privacy and data governance, workforce transformation, and regulatory governance frameworks. Beyond synthesising existing knowledge, the study critically examines tensions between innovation and regulation, human oversight and automation, and Western and non-Western AI governance approaches. The paper proposes an integrated Ethical AI Governance Framework and discusses practical implications for boards of directors, policymakers, and organisational leaders. The study contributes to the growing discourse on responsible AI by offering a governance-centered perspective that balances technological innovation with ethical responsibility and sustainable organisational performance