Insight: Gaps in AI-Compliant Complementary Governance Frameworks' Su

Winners Consulting Services Co. Ltd. (積穗科研股份有限公司), Taiwan's expert in AI Governance, draws urgent attention to a landmark 2025 research review that exposes a critical structural flaw in the global AI compliance ecosystem: the EU AI Act (Regulation (EU) 2024/1689), while groundbreaking as the world's first comprehensive AI legal framework, creates systemic disadvantages for small and medium-sized enterprises (SMEs), municipalities, and public authorities — precisely the organizations that constitute the backbone of Taiwan's economy and public sector. For Taiwanese enterprises pursuing ISO 42001 certification or preparing for EU AI Act compliance, understanding these structural asymmetries is no longer optional — it is the starting point for any credible AI governance strategy.

About the Authors and This Research

This structured literature review, published in 2025 through the OpenAlex AI Governance platform, was co-authored by two scholars whose complementary expertise gives the paper both methodological rigor and policy relevance. W. Holmes Finch is a senior professor of educational psychology and quantitative methods at Ball State University in the United States, with an h-index of 24 and over 2,701 cumulative citations — a record that places him firmly among established voices in applied research methodology. His recent pivot toward AI governance analysis brings a rare combination of statistical discipline and regulatory scrutiny. Co-author Marya Butt, while earlier in her publication career (h-index: 2, 28 cumulative citations), contributes a focused lens on AI ethics and policy operationalization. Together, they conducted a systematic examination of five major governance frameworks: the EU AI Act, ALTAI (Assessment List for Trustworthy AI), ISO/IEC 42001, the NIST AI Risk Management Framework, and the OECD AI Principles. The result is a research contribution that Taiwanese enterprise decision-makers — from CTOs to compliance officers — should treat as essential reading when designing their AI governance roadmaps.

Five Frameworks, Three Critical Gaps: What the Research Found

The central argument of this review is both simple and consequential: the EU AI Act's principle of proportionality — the idea that compliance obligations should be calibrated to the scale and capacity of each actor — breaks down in practice. Large, technologically advanced AI providers have the legal, technical, and financial resources to navigate complex compliance requirements. Low-capacity actors do not. The research identifies three structural gaps that perpetuate this asymmetry.

Finding 1: ALTAI Provides Normative Scaffolding But Lacks Auditability

The EU Commission's ALTAI (Assessment List for Trustworthy AI) functions as a soft-law ethics instrument — a self-assessment checklist designed to guide organizations toward trustworthy AI development. The research finds that while ALTAI is valuable for building awareness and normative alignment, it fundamentally lacks the auditability infrastructure required to satisfy EU AI Act obligations. Specifically, ALTAI does not provide the actionable, documented processes necessary for third-party verification. For Taiwanese enterprises that have adopted ALTAI as their primary AI governance tool, this finding is a direct warning: ALTAI can serve as a conceptual starting point, but it cannot substitute for the structured, auditable management systems required by ISO/IEC 42001 or the EU AI Act's high-risk AI provisions (Articles 9 through 15, Chapter III).

Finding 2: ISO 42001 and Hard-Law Frameworks Remain Inaccessible for Under-Resourced Organizations

ISO/IEC 42001, as an AI management system standard, offers a far more operationalizable framework than ALTAI and aligns closely with EU AI Act compliance requirements. However, the research identifies a persistent accessibility gap: for SMEs, local governments, and public authorities — organizations with limited compliance budgets and without dedicated AI legal counsel — even ISO 42001's structured approach can feel prohibitively complex. The study calls for the development of lightweight compliance frameworks that extend ALTAI's normative scaffolding into actionable and auditable processes specifically tailored to low-capacity actors. This is a direct design challenge that Taiwan's AI governance ecosystem must address, particularly as the Taiwan AI Fundamental Act advances through the legislative process.

Finding 3: The Compliance Ecosystem Is Structurally Asymmetric

Perhaps the most consequential finding is the identification of structural asymmetry within the compliance ecosystem itself. The EU AI Act's risk-based regulatory architecture — distributing obligations across four risk tiers (prohibited, high-risk, limited-risk, and minimal-risk) — was designed to create proportional compliance pathways. In practice, however, the research demonstrates that large AI providers with sophisticated legal and technical teams can absorb compliance costs as operational overhead, while smaller actors bear disproportionate burden relative to their capacity. This dynamic threatens to transform AI compliance into a competitive moat for large enterprises, inadvertently suppressing AI governance adoption among the organizations that arguably need it most.

What This Means for Taiwan: Navigating a Triple Regulatory Convergence

Taiwanese enterprises are operating at the intersection of three converging regulatory pressures that demand immediate, strategic attention. First, the EU AI Act has been in force since August 2024, with full obligations for high-risk AI systems applying from 2026. The Act's extraterritorial scope means that any Taiwanese company providing AI systems or services used within the EU — whether through software exports, cloud services, or embedded AI in manufactured products — falls within its regulatory perimeter. Second, ISO/IEC 42001 has rapidly become a baseline expectation for European procurement processes and global supply chain due diligence. Taiwanese suppliers without ISO 42001 certification face growing disadvantage in international tendering. Third, Taiwan's own AI Fundamental Act (人工智慧基本法) is advancing through the Legislative Yuan, establishing a domestic AI risk classification and governance accountability framework that mirrors the EU AI Act's risk-tiered architecture. The structural asymmetries identified by Finch and Butt — the compliance burden falling disproportionately on smaller, less-resourced organizations — are not a distant European problem. They are the daily reality for thousands of Taiwanese SMEs in the technology, manufacturing, and public service sectors who must now simultaneously prepare for international AI governance standards while operating within constrained resource environments.

Winners Consulting Services Co. Ltd.: Bridging the Compliance Gap for Taiwan

Winners Consulting Services Co. Ltd. (積穗科研股份有限公司) has built its AI governance practice precisely around the challenge this research describes: helping organizations with real-world resource constraints build ISO 42001-aligned, EU AI Act-responsive, and Taiwan AI Fundamental Act-ready governance systems — without the prohibitive cost structures designed for multinational corporations. Our approach translates the normative scaffolding of frameworks like ALTAI into auditable, documented management processes that can withstand third-party scrutiny. We calibrate the depth and complexity of our compliance frameworks to each client's actual AI application portfolio, organizational scale, and risk exposure.

1. AI Application Inventory and Risk Classification (Days 0–30): Aligned with EU AI Act Annex III and ISO 42001 Clause 6, we map all current AI applications against the four-tier risk architecture, producing an auditable AI Risk Heat Map that prioritizes compliance actions by exposure level. This foundational step directly addresses the "enforceability gap" identified in the research.
2. Lightweight Compliance Framework Design (Days 30–60): Drawing on the paper's call for lightweight compliance frameworks that extend ALTAI's normative scaffolding into actionable processes, we design role-specific obligation maps, risk assessment procedures, and governance policy documents sized appropriately for SMEs and mid-tier enterprises — not templates repurposed from Fortune 500 compliance manuals.
3. Continuous Monitoring and Taiwan AI Fundamental Act Alignment (Days 60–90): We establish internal audit schedules, monitoring indicators, and review protocols aligned with ISO 42001 Clause 10 (Improvement), ensuring clients maintain ongoing compliance readiness and can rapidly adapt when the Taiwan AI Fundamental Act's implementing regulations are finalized.

Frequently Asked Questions

Does the EU AI Act directly bind Taiwanese companies that do not operate in Europe?

Yes, if their AI systems' outputs are used within the EU. The EU AI Act (Regulation (EU) 2024/1689) applies extraterritorially: any provider whose AI system is placed on the EU market or whose AI outputs are used by EU-based users falls within scope, regardless of the provider's physical location. Taiwanese technology exporters, software-as-a-service providers, and manufacturers embedding AI in products sold in Europe must audit their AI application portfolios against the high-risk AI system list (Annex III). The 2025 Finch and Butt research specifically highlights that SMEs — a category covering the majority of Taiwan's tech sector — face disproportionate compliance burdens under this framework without adequate support structures in place.

What is the most common AI governance blind spot for Taiwanese enterprises?

The most prevalent blind spot is having an AI ethics policy or self-assessment checklist (often ALTAI-based) without the underlying auditable documentation required for third-party verification. This research confirms that ALTAI, as a soft-law tool, has inherent structural limitations in auditability. EU AI Act Article 9 requires continuous, documented risk management systems — not one-time declarations. Taiwanese enterprises frequently mistake policy existence for compliance readiness. The corrective action is straightforward: supplement ethics policy documents with ISO 42001-aligned risk assessment procedures, control evidence logs, and management review records that can withstand audit scrutiny.

How does ISO 42001 certification help Taiwanese companies comply with both the EU AI Act and Taiwan's AI Fundamental Act?

ISO/IEC 42001 is currently the only internationally recognized standard specifically designed for AI management systems. Its structure closely mirrors the compliance architecture demanded by the EU AI Act — particularly its provisions on risk management (Article 9), data governance (Article 10), and technical documentation (Article 11). Simultaneously, Taiwan's AI Fundamental Act (人工智慧基本法), currently in legislative review, references international standards including ISO 42001 as benchmarks for domestic AI governance requirements. By achieving ISO 42001 certification, Taiwanese enterprises simultaneously build the documentary evidence base for EU AI Act high-risk AI compliance, demonstrate AI governance maturity to European buyers and procurement authorities, and establish the foundational management system for Taiwan AI Fundamental Act readiness — making it the single highest-leverage compliance investment available today.

How long does it realistically take to build an AI governance framework from scratch?

Based on Winners Consulting Services Co. Ltd.'s practical experience guiding Taiwanese enterprises, a lightweight ISO 42001-aligned AI management system can be established in 90 days for organizations with fewer than 10 active AI applications and an existing quality management culture. A full implementation, including documentation sufficient for third-party pre-audit, typically requires 6 to 12 months. The key determinant is not company size per se, but the number and complexity of AI applications in scope. The research reviewed in this article explicitly advocates for lightweight compliance pathways tailored to low-capacity actors — our 90-day diagnostic-to-framework service is designed precisely to deliver that. Month one focuses on inventory and risk classification; month two on framework design and policy drafting; month three on monitoring mechanism implementation and staff training.

Why should Taiwanese enterprises choose Winners Consulting Services Co. Ltd. for AI governance advisory?

Winners Consulting Services Co. Ltd. (積穗科研股份有限公司) is among Taiwan's very few consulting firms with simultaneous depth in ISO management system certification advisory, AI governance policy research, and dual-track regulatory interpretation spanning both EU AI Act requirements and Taiwan's evolving AI Fundamental Act. We actively monitor the latest international academic research — including the 2025 Finch and Butt paper reviewed here — to ensure our advisory methodology remains aligned with the global frontier of governance thinking, not outdated compliance templates. Our frameworks are built for Taiwan's actual enterprise landscape: SMEs and mid-tier manufacturers who cannot absorb multinational-scale compliance costs but cannot afford regulatory exposure either. Every engagement begins with a free diagnostic that produces a concrete, prioritized action plan — not a generic report.