The concept of artificial intelligence (AI) is altering the way organizations operate. AI systems will deliver more intelligent results in a shorter period of time, starting with decision-making up to innovation. However, the more it is adopted, the more issues to do with fairness, transparency, and accountability are raised. Most organizations are finding it difficult to reconcile innovation and ethical responsibility. This study discusses the role of internal capabilities in making firms govern AI responsibly. The study proposes a model linking four key organizational capabilities, i.e., explainable AI capability, contextual learning adaptability, experiential learning orientation, and organizational ethical alignment to responsible AI performance. The impact of these capabilities on user interpretability and trust, responsible AI governance maturity, and decision transparency is also examined in this study. The results show that explainable AI capability and learning adaptability enhance user trust, while experiential learning orientation and organizational ethical alignment significantly improve governance maturity. Governance maturity and decision transparency lead to stronger responsible AI performance. Interestingly, not all expected paths held as user interpretability trust and governance maturity did not directly predict decision transparency. The findings show that building technical and cultural capabilities inside firms is essential not just to deploy AI effectively, but to do it responsibly. For leaders, this means moving beyond checklists and toward meaningful governance rooted in learning, transparency, and ethical alignment.