Sirithida ChaivisuttangkunPornsit JirapornPenn State Great ValleyMahidol University2020-06-022020-06-022020-01-01Finance Research Letters. (2020)154461232-s2.0-85084742244https://repository.li.mahidol.ac.th/handle/20.500.14594/56171© 2020 Elsevier Inc. Co-opted directors are those appointed after the incumbent CEO assumes office. Prior research shows that co-opted directors affect the quality of board monitoring. We explore how co-opted directors influence firm risk during a stressful time, focusing on the financial crisis of 2008. Firms with more co-opted directors experience significantly lower firm risk during the crisis. The results hold for total risk, idiosyncratic risk, and systematic risk. This corroborates the notion that, managers are inherently risk-averse, particularly so during the crisis. Co-opted directors allow managers to adopt corporate policies that reflect their own risk preferences, resulting in lower firm risk.Mahidol UniversityEconomics, Econometrics and FinanceArticleSCOPUS10.1016/j.frl.2020.101538