The generative artificial intelligence governance paradox: Driving innovation while challenging global corporate oversight in multinational firms

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Generative artificial intelligence (AI) is revolutionizing industries by enhancing operational efficiency, fostering innovation, and automating decision-making processes. However, its integration into multinational firms introduces a paradox: while enabling unprecedented innovation and growth, it presents significant governance challenges, particularly concerning transparency, accountability, and regulatory compliance. This research investigates the governance paradox of generative AI in multinational firms, focusing on the technology, finance, and manufacturing sectors. Employing a mixed-methods approach, the study combines qualitative interviews with corporate governance officers and AI ethics specialists and quantitative surveys from global firms to identify key challenges and strategies for navigating this complexity. The findings highlight that while 65% of surveyed firms have implemented AI governance frameworks, only 30% fully comply with international standards. Key challenges include the “black box” nature of AI, regulatory fragmentation across jurisdictions, and ethical risks such as bias and labor displacement. The study concludes that firms must adopt hybrid governance models, enhance transparency through AI tools, and establish robust ethical oversight mechanisms. Furthermore, the research underscores the urgent need for global cooperation to develop consistent AI governance standards, ensuring that innovation and ethical responsibility progress hand in hand.

Keywords: Generative AI Governance, Corporate Oversight, Multinational Firms, Ethical AI, Regulatory Compliance

JEL Classification: F23, M14, O33

Received: 05.10.2024
Accepted: 22.10.2024

How to cite: Nakajima, R. (2025). The generative artificial intelligence governance paradox: Driving innovation while challenging global corporate oversight in multinational firms. In M. Pazarskis, A. Kostyuk, V. Santolamazza, & P. Capuano (Eds.), Corporate governance: Scholarly research and practice (pp. 91–95). Virtus Interpress. https://doi.org/10.22495/cgsrapp17