Industrial deregulation signifies the relaxation of market control mechanisms and consequently triggers changes in firms' internal governance systems, which is why it has been emphasized as an important source of corporate governance change. However, corporate governance is also influenced and altered by the institutional environment. Nevertheless, existing studies examining the relationship between industrial deregulation and corporate governance changes have proceeded without considering the influence of the institutional environment. In other words, there is a lack of empirical research on the impact of the interaction between regulatory changes and institutional enforcement on corporate governance changes. Accordingly, this study aims to comparatively analyze the effects of deregulation and institutional enforcement in the process of corporate governance changes. From a comprehensive perspective encompassing compensation structures and monitoring systems that control management—both of which are identified as critical issues in corporate governance—this study seeks to add more nuanced explanatory power to existing research by re-examining changes in corporate governance during industrial deregulation. This study presents results showing that deregulation serves as a catalyst for institutional enforcement, through a comparative analysis between a group of banks within the U.S. financial industry that experienced deregulation between 1981 and 1990 and a group of firms from various industries that did not experience deregulation during the same period. Specifically, the findings demonstrate that while the institutional environment provides a legitimate direction for corporate governance changes, industrial deregulation serves to accelerate corporate governance changes in that legitimate direction. Additionally, this study sought to examine the process of corporate governance change along a continuum. The research results revealed that in the deregulated bank group, the process involved first establishing compensation systems before changing monitoring systems.