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A Risk-Based Ethical Governance Framework for Retail AI with Proportionality, Oversight, and Regulatory Alignment

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  • Sri Harsha Konda

Abstract

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.

Suggested Citation

  • Sri Harsha Konda, 2026. "A Risk-Based Ethical Governance Framework for Retail AI with Proportionality, Oversight, and Regulatory Alignment," International Journal of Computing and Engineering, CARI Journals Limited, vol. 8(2), pages 23-31.
    • Handle: RePEc:bhx:ojijce:v:8:y:2026:i:2:p:23-31:id:3493
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