Available online at www.icas.my __________ * Corresponding author. Tel.: +6049287338 E-mail: zaimah2258@uum.edu.my © 2018 The Authors Proceedings of the 5 th International Conference on Accounting Studies (ICAS 2018) 16-17 October 2018, Penang, Malaysia The Perspective of Corporate Governance Reformation from the Lens of Institutional Theory Zaimah Abdullah* a , Amon Chizema b , Sitraselvi Chandren a a Tunku Puteri Intan Safinaz School of Accountancy, Universiti Utara Malaysia b Birmingham University, United Kingdom Abstract The purpose of this conceptual paper is to address the importance of examining the link between corporate governance and foreign equity investment through the right theoretical lens. The paper focuses on the discussion of corporate governance reformation in Malaysia that gradually converged towards Anglo-American model at the pinnacle of Asian financial crisis 1997/1998. By embracing institutional theory, the actions taken by majority of organizations in Malaysia in the aftermath of the crisis are justified and the reactions of foreign investors towards the corporate governance recuperation in Malaysia’s institutional corporate setting are explained. This paper also provides in depth explanation of the applied theory, which under the scope of neo-institutional theory that accentuated on legitimacy. Besides, this paper claims the relevant use of this theory with the subject discussed, thus argues the significant importance of theoretical aspects of the institutional context to the study of governance change and institutional dynamic setting in emerging country like Malaysia. In summary, the use of apt lens of theory to justify the reactions and actions taken by the actors is imperative as an essence to convey a period of momentous changes in the storyline of the governance change from the perspective of the foreign investors. Keywords: Corporate governance, foreign equity investment, Institutional Theory, Asian Financial Crisis 1997/1998, corporate governance reformation, Malaysia. 1. INTRODUCTION There are constant evolutions of discussion among scholars on corporate governance issues in Malaysia especially in the aftermath of the disastrous Asian Financial Crisis (AFC) that hit the country around the year 1997/1998. Following the financial crisis, corporate governance in Malaysia has been claimed to undergo a process of institutional change. This action has been translated as corporate governance reform. Since that, the issue of corporate governance remains as a topic of perennial interest and controversy. It has attracted much interest of many related parties to contribute their ideas, sharing their views as well as bringing up evidences on how to strengthen the weakness of corporate governance practice in Malaysia. The discussion, however, remains unsettled every time. Considering the substantial amount of corporate governance issues that are beyond extend to comprehend at one time, this paper aims to focus on the discussion of theoretical issue of corporate governance reformation that gradually converged towards Anglo-American model at the pinnacle of Asian economic crisis 1997/1998. Our paper claims two theoretical contributions to the field of corporate governance. Throughout the ongoing discussion in this paper, the theoretical aspects are highlighted where the importance of the institutional context to the study of governance change is argued to be significant. Therefore, we counter the use of universal application of agency theory in the institutional dynamic setting of governance change in emerging country like