For all the hand-wringing over CEO pay, we rarely hear much bellyaching from shareholder activists and others about director pay. Based on the silence, I can only conclude that most people think that, in general, board directors deserve what they get paid.

What do they get paid? A survey just out from Hay Group finds that median director pay at the largest 300 public companies increased from $213,774 in 2010 to $227,250 in 2011, including cash salary, options and restricted stock, and all the Starbucks coffee they can gulp down during meetings. That's not even enough to hit President Obama's definition of “those who earn a little more.” And it really seems like a bargain when you consider that the Red Sox are paying “ace” pitcher Josh Beckett (5 wins, 10 losses) $16 million a year. (Sorry, I had to get that off my chest.)

But $227,000 isn't chump change either, especially when many directors sit on two or three boards. Greg Maffei sits on five, including Barnes & Noble and Electronic Arts, and still finds time for his regular job as CEO of Liberty Media. For board members, who are often the worry committee, that's a lot of brow-furrowing for one person. (Over-boarded? Yes. He's spread thinner than Ryan Seacrest.)

Of course directors have their detractors who say they are overpaid. John Gillespie, a former investment banker—who probably knows a thing or two about being overpaid—summed up his feeling that boards are in dire straits in the title of the book he co-authored—Money for Nothing: How the Failure of Corporate Boards is Ruining American Business and Costing Us Trillions. “The world of boards has become an entrenched insiders' club—virtually free of accountability or personal liability,” Gillespie and co-author David Zweig write.  Board members get too much for too little work, they conclude.

It's true that board members don't put in long hours at the office. In fact, a National Association of Corporate Directors study conducted last year found that the average director worked just 4.3 hours a week per board—a pretty good gig if you can get it.

Toxic Directors

The reality is that directors get paid as much for the personal risk they take on as for the work they do. An old friend of mine who sat on several boards used to talk about toxic directors. It sounds like a group of comic-book villains, but these are the folks who were on boards like Countrywide, Bear Stearns, or BP when things fell to pieces. Now I'm not giving them a pass on their responsibility for oversight at these companies; the failures happened on their collective watch. It's impossible to know without being in the boardroom, but there were likely directors at these companies that pushed for change or tried to do the right thing but got run over by strong CEOs or the will of the majority.

Doesn't matter now; their names are mud. Toxic directors are usually quietly removed from the other boards they serve on, find their juicy consulting gigs dried up, and get served last at country-club luncheons. OK, so nobody is likely to cry for them, but their reputations are permanently tarnished.

Supply and demand weighs heavily on the pay equation, too. Ask any director on a nominating committee and they will tell you that the pool of qualified candidates for board service at large companies is incredibly shallow. Remember when News Corp. put a 27-year-old opera singer on its board? That's not so funny now, is it?

Despite News Corp.'s board-oversight failings and Gillespie's observations, board directors have come a long way towards being more accountable. According to Harvard professor and corporate governance expert Jay Lorsch, board members are more engaged in the companies whose boards they sit on than ever before. “They are trying and are doing a much better job. They are more proactive, and far more in touch with what's happening inside the company,” he says.

In fact, he says directors may be trying to do too much. “They are finding that there are limitations to what they can do. The more they try to do, the more complex and complicated the issues get,” says Lorsch, author of The Future of Boards. “Some choices will need to be made about exactly what we expect directors to do.”

What they can do is pay more attention to the risks their companies are taking and, clearly, most boards have pushed in that direction. They realize that overseeing those risks is what they get paid for, and while they are well compensated, few will tell you that it's enough to cover the risk of becoming toxic.