Ethical Governance in the Age of Artificial Intelligence: Implications for HRM and Digital Transformation in Service Industries

This study examines the role of ethical corporate governance in the context of artificial intelligence (AI) adoption and digital transformation within service industries. Drawing on a multi-country dataset of 1,207 firms, the research explores how ethical practices, as reflected in CSR rankings, influence firm performance and organizational outcomes. The study further discusses the implications of ethical governance for human resource management (HRM), particularly in fostering AI readiness, employee trust, and sustainable digital transformation. Results indicate that ethical performance is positively associated with market outcomes, suggesting that ethical governance can support human–AI collaboration and service quality enhancement. The findings contribute to the emerging discourse on AI-driven organizational transformation by highlighting the importance of integrating ethical frameworks into governance and HRM strategies.