Abstract
Ethical leadership is critical in the digital age, where organisations increasingly rely on artificial intelligence (AI), automation, and data-driven decision-making. This study explores the role of ethical leadership in fostering trust, transparency, and corporate responsibility while addressing moral dilemmas in AI governance, data privacy, and workforce automation. A critical literature review was conducted, analysing scholarly works on AI ethics, digital transformation, and corporate governance frameworks. Findings indicate that ethical leadership enhances employee engagement, mitigates algorithmic bias, ensures compliance with privacy regulations like GDPR, and promotes workforce upskilling to counteract job displacement. This study highlights the need for structured ethics training, decision-making models, and robust governance structures to ensure digital transformation aligns with societal and ethical values.