Balancing Compliance and Innovation: Addressing Explainability in AI Systems under the EU AI Act by Vladimir Boshnjakovski A master’s thesis submitted in fulfillment of the requirements for the degree of Executive Master of Business Administration (MBA) in Digital Transformation and Data Science WU Executive Academy Vienna University of Economics and Business (WU Vienna) Supervisor: Sabrina Kirrane, Ph.D. Date of Approval: August 2025 Location: Vienna, Austria Keywords: Explainable Artificial Intelligence, Data Governance, EU AI Act, Compliance, Innovation, Responsible AI, Law and Technology Copyright © 2025, Vladimir Boshnjakovski