Purpose This paper aims to explore the asymmetric effect of liquidity risk (LR) and Shariah board size on bank financial stability for a panel of Islamic banks (IBs) based in Gulf Cooperation Council (GCC) and Southeast Asian countries over the 2006–2019 period. Design/methodology/approach This paper uses the asymmetric nonlinear autoregressive distributed lag (NARDL) error correction model insofar as it allows assessing not only whether IBs with large boards outperform their peers with reduced boardrooms but also unveiling the potential asymmetries between LR and stability. Findings The findings show that while increasing the number of the Shariah board members does not impact the financial stability of IBs in both the short and long runs its decrease appears to enhance their stability in the long run. The findings also show that a hike, as well as a fall in LR, significantly influences the stability in the long run, which underlines the role that LR plays in bank financial stability. Research limitations/implications A prominent line of future research may consist in extending the country sample to cover more representative full-fledged IBs based on different regions, which allows the breakdown of the sample into GCC-based and non-GCC-based IBs. Doing so is interesting in terms of governance implications. Another extension would consist in considering additional sources of risk to stability. Practical implications IBs should enhance their expertise, which helps them diversify their funding strategy and cater for liquidity solutions. They also must establish a better Shariah governance framework to contain their risk-taking behavior that ultimately contributes to achieving financial stability. Originality/value This paper contributes to the empirical literature in Islamic banking by performing a model that simultaneously accounts for both short- and long-run asymmetries in the relationship between the financial stability of full-fledged IBs, the LR and the size of the Shariah supervisory board.