[Exclusive] KOSME to Introduce 'Transparent Management Index'... "Strengthening Internal Controls in the AI Era"

Risk Management System Overhauled Ahead of Basic AI Act Implementation
Quantitative Evaluation of Integrity, Ethics, and Compliance Performance
First Introduction Planned for June?July Next Year; Public Disclosure Under Consideration

The Korea SMEs and Startups Agency (KOSME) is moving forward with the introduction of the "Transparent Management Index," which quantifies the institution's internal control standards and transparent management performance. Internal control refers to voluntary and proactive efforts to manage various risk factors in advance that could negatively affect organizational goal achievement, financial reliability, and regulatory compliance, including corruption.

KOSME, in particular, plans to enhance transparency in management by transforming internal control activities-previously regarded as qualitative measures-into quantitative indicators, in line with the implementation of the Basic AI Act next year.

According to government sources on December 16, KOSME is currently planning and developing the "KOSME Transparent Management Index" (tentative name), aiming for implementation as early as the first half of 2026. Related discussions began at the end of November this year, and the agency is currently working on the initial design. A KOSME official stated, "Even though internal control activities are being carried out, there was no indicator to provide a comprehensive overview," adding, "We determined that a regular indicator is necessary for members to understand the current level of implementation within the organization, in order to strengthen integrity, ethical management, and compliance functions."

The background for developing this index lies in the growing demand for stronger internal controls over the years. With the Basic AI Act set to take effect in January next year, the widespread adoption of generative AI across all work processes has increased the need to proactively manage new risk factors and responsibilities, such as information security, that may arise in business procedures. This has served as a catalyst for the full-scale discussion on introducing the Transparent Management Index.

According to the "Comprehensive Integrity Assessment of Public Institutions" by the Anti-Corruption and Civil Rights Commission, KOSME received an overall integrity rating of Grade 4 in 2023. The overall integrity rating is calculated by combining internal and external integrity perception (60%) and integrity efforts (40%), with deductions applied for any corruption incidents, resulting in a scale from Grade 1 to Grade 5. This grade represents a decline compared to 2022, when the revised evaluation system was first implemented.

Although all indicators improved last year, KOSME plans to strengthen management through the introduction of the Transparent Management Index and other measures. The agency intends to develop the index by referencing other public institutions' cases, ESG performance indicators, and research studies, and to use it as a mid- to long-term performance management tool. KOSME plans to release the index internally through its intranet as early as June or July next year, and will comprehensively review operational results and internal feedback before deciding whether to announce it externally.

This content was produced with the assistance of AI translation services.