The effect of co-opted directors on firm risk during a stressful time: Evidence from the financial crisis

•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.•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.