<p>The research examines the impact of board co-option on liquidity risk in Australian and New Zealand banks. The data comprises commercial banks from both countries, covering the period from 2011 to 2021. The empirical results demonstrate that a higher proportion of co-opted directors on the board are significantly associated with increased liquidity risk. These findings exhibit robustness across the measures of Board Co-option, Tenure Weighted Co-option, and Residual Co-option, thereby substantiating the applicability of our econometric model. Furthermore, a distinctive comparative analysis based on separate subsamples for both countries yields results that are consistent with the full sample, thereby reinforcing our econometric model. The study recommends that banks in these countries develop robust risk management frameworks for liquidity risk. Additionally, it suggests that regulators should carefully monitor board co-option as a sensitive measure of board governance to ensure effective risk management policies. The study also emphasizes the need for further research on this topic in other geographic locations, employing additional measures of liquidity risk.</p>