A Risk-Based Ethical Governance Framework for Retail AI with Proportionality, Oversight, and Regulatory Alignment
DOI:
https://doi.org/10.47941/ijce.3493Keywords:
Ethical AI Governance, Retail Technology, Algorithmic Fairness, Proportionality Framework, EU AI ActAbstract
Purpose: This paper proposes an Ethical Governance Framework for intelligent retail systems, addressing algorithmic bias, privacy intrusions, and limited customer recourse that erode trust and attract regulatory scrutiny.
Methodology: The framework synthesizes six principles (fairness, privacy by design, proportionality, transparency, accountability, human oversight) drawing on OECD AI Principles, NIST AI RMF, GDPR [13], and EU AI Act [12]. Evaluation comprises scenario-based ethical risk analysis, regulatory requirement mapping, and assessment against documented incidents.
Findings: The framework demonstrates 87.5% scenario mitigation, 92% GDPR coverage, 100% EU AI Act prohibited practice coverage, and ROI of 100% to 430% with 6-to-18-month payback. Key innovations include a four-level Proportionality Ladder for graduated interventions, structured external stakeholder engagement, and implementation economics.
Unique contribution to theory, practice and policy: This work provides a system-agnostic governance layer for intelligent retail platforms, operationalizing abstract ethical principles into concrete technical controls and organizational processes aligned with emerging regulatory requirements.
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Copyright (c) 2026 Sri Harsha Konda
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