By Elizabeth G. Olson
November 2, 2011

FORTUNE — Troubled companies often fly under the investor radar, grabbing attention only when there is news of a chief executive scandal, eye-popping salaries, or accounting fraud. Few companies get in hot water over who is on their board of directors.

But some corporate investigators are saying that this long sleepy aspect of companies needs much closer scrutiny because of the crucial role that boards play in overseeing corporate strategy, executive compensation, and the top managers themselves.

And board members are certainly well compensated for it. The average Fortune 200 director collected a median $228,058 last year — which can include cash, meeting fees, stock and stock options — according to a recent compensation survey by the National Association of Corporate Directors.

It’s a plum job so why shouldn’t company founders or executives appoint buddies to rubber-stamp their decisions if they wish? After all, shareholders had their chance earlier this year to vote against the directors they objected to, but few stepped up to challenge lax oversight or cronyism.

The perils of corporate cronyism

A track record of poor corporate governance links directly to high-profile business disasters, says Paul Hodgson, spokesman and senior researcher for GovernanceMetrics International, a corporate governance research firm.

“Traditional measures of evaluating risk are inadequate,” contends Hodgson, and corporate information is “too often misleading and easily manipulated.”

Hodgson points to disasters like the Gulf oil spill and the West Virginia mine collapse where inquiries found flawed governance at BP (BP) and Massey Energy, respectively. In the aftermath of the 2008 financial crisis, several companies uncovered negligent oversight, which allowed risks to go unidentified until disaster hit.

Such corporate debacles “have destroyed shareholder value and global confidence in institutions once thought to be market leaders,” despite market and regulatory reforms, Hodgson argues.

To draw attention to the problem, GMI recently released a “risk list” of 10 corporations across different industries that have been red-flagged for board-related and other governance problems.

Picking up on the warning signals

The most common problems involve boards with directors with unusually long tenures, advanced ages, no women or minorities, or personal ties to a company’s top executives.

Among the problem companies is News Corp. (nws), the media behemoth, which has been battling charges of illegal and unethical behavior. But even before its phone hacking scandal came to light, the company was receiving failing governance ratings because its board was sprinkled with directors with close ties to chairman and CEO Rupert Murdoch, notes Hodgson.

Independent directors are key to avoiding scandals, says Rohan Williamson, a finance professor at Georgetown’s McDonough Business School. But many companies list directors as independent — meaning they have no ties to management — which he believes is not enough.

“Directors represent shareholders, and they are there to advise and monitor management behavior. You want someone who is truly independent ,” he says.

Who is independent, really?

Determining a board member’s independence often comes as challenge, he says, as directors often share backgrounds or less than obvious ties to each other.

Williamson has been studying the composition of boards at banks across the country and argues that “the more independent directors were, the less risk banks took on.”

Overall, nearly 20% of outside directors listed as independent and who served as chairs of company boards did not truly meet the standard, according to a recently released study by Equilar, Inc., which tracks company compensation.

That means these directors own, or are associated with, “an entity that owns the majority of shares in the company,” according to the report.

When GMI combed its company files to compile the list, it found that directors at seven of the 10 troubled companies it examined were elected by controlling shareholders who were either owners, managers, or both — so they did not meet the definition of an independent director.

For example, The Apollo Group (apol), a major player in for-profit education, has a problem similar to that of News Corp. – its founders dominate the company. GMI found that Apollo “has no independent directors since all directors are elected by a separate class of stock that is entirely owned by management and related trusts.”

The company, whose best-known subsidiary is The University of Phoenix, has come under government scrutiny on grounds that it recruits under-qualified students who later default at a high rate on their government-subsidized loans.

Other companies, including MDC Holdings (mdc), whose home-building operation is called Richmond American Homes, have issues with directors with long tenures or business or personal entanglements with company executives.

MDC Holdings faces all the problems plaguing the housing industry, but its “poor governance threatens to hobble its recovery even more than that of its peers,” according to GMI’s report.

MDC’s top two executives own almost 25% of the company’s stock, and many directors have had lengthy tenures, and their ages skew older. In a rare slap at management, only about one-third of company shareholders voted to approve the company’s executive pay structure earlier this year.

Media firm Discovery Communications (DISCA) may also have too much personal entanglement within its board, according to GMI. The corporate research firm classified just three of the company’s11 board members as independent, noting that “many directors hold interlocking directorships with companies largely controlled by dominant shareholder John Malone,” who is the chairman of Liberty Media Corp.

Even so, shareholders gave at least 75% approval to each director at the last annual meeting.

The challenge of developing a remedy

The directors’ association says that 10,000 directors enroll annually in its programs to keep current with their fiduciary and other responsibilities. Last year, the NACD created a fellowship program — which, so far, has enrolled about 150 directors — to improve boardroom performance, says Henry Stoever, the group’s spokesman.

Although corporate watchdogs continue to push for the overhaul of crony-prone boards and for the installation of watchful directors who can choke off wrongdoing, it is not easy to accomplish.

For example, despite reams of disclosures of unsavory company actions, News Corp. shareholders did not dislodge any of the company’s 15 incumbent directors last month. The closest shareholders came to rebellion came from the lower voter approval for re-electing Murdoch’s two sons, Lachlan and James.

“Shareholders don’t react until they are losing money,” says Williamson, of Georgetown, “and so far, that’s not the case with News Corp.”

But he pointed out that such a high-profile scandal has a positive side because “it shines a light on what can happen when independence is not there, and now maybe people will look around more closely at firms they are invested in.”

Next year, “we are likely to see more shareholder reaction to the lack of director independence,” Williamson predicts.

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