Artificial Intelligence (AI) is increasingly positioned as a transformative force for institutional governance and university management, yet research on its specific impact on educational leadership remains emergent. This systematic review aims to synthesize current evidence regarding the application of AI in higher education management, focusing on institutional decision-making, policy development, and operational efficiency. Following the PRISMA 2020 framework, a comprehensive search of the ERIC database for the period 2022–2025 was conducted, yielding 3,669 initial records. After rigorous screening for relevance to management and governance, ten high-quality studies were selected for analysis. The findings reveal that AI is being deployed across diverse functions, including enrollment optimization, predictive analytics for student success, and the automation of managerial tasks, often described as a cybernetic panacea for administrative burdens. However, the results also highlight a significant tension between the pursuit of neoliberal efficiency and ethical concerns regarding data privacy, algorithmic bias, and the potential for increased surveillance. Global perspectives from the United Kingdom, China, Turkey, Zimbabwe, Morocco, Canada, and the United States highlight a critical institutional readiness gap, with over 75% of stakeholders feeling unprepared for AI integration. This review concludes that while AI offers substantial benefits for data-driven governance and smart management, its successful adoption requires the development of comprehensive ethical frameworks and digital leadership to mitigate risks posed by privacy breaches and the loss of human agency.