Outraged over CEO pay and bonuses? Here are the real culprits.

The big pay raises for CEOs generate all the outrage (and deservedly so). But if you want to do more than rant, save a little anger for the people who approved them.

The boards of directors at America's corporations are at the heart of the problems on Wall Street, according to a new book, "Money for Nothing."

Not the board members themselves – generally upstanding people. But the board system itself, which encourages too much deference to CEOs (even though they report to the boards) and not enough real oversight of their actions, according to the authors of "Money for Nothing."

Unfortunately, the laxity of board oversight takes money out of the pocket of everyone who owns a share of US stock. Even if you aren't a shareholder, this stuff matters. The right reforms at the board level could prevent the next meltdown.

After all, who approved those zany pay packages that encouraged excessive risk-taking at places like Lehman Brothers, AIG, and Merrill Lynch? In one recent year, boards of directors awarded an average 10 percent of net profits to their companies' top five executives, according to the book.

It doesn't stop at pay. In one egregious example, a board used $12.1 million of shareholder money to buy the CEO's antique map collection to display at headquarters! (For more details, play the "Pay that CEO" game at the "Money for Nothing" website.)

Where were their boards of directors when companies like Bear Stearns and General Motors were going under?

"You shake your head at some of these things as a shareholder, employee, and now a taxpayer," says John Gillespie, coauthor of the book and an investment banker for 18 years with Lehman Brothers, Morgan Stanley, and Bear Stearns.

Sure, these are egregious examples, but they illustrate the stresses and conflicts facing many boards in corporate America.

For example, directors are supposedly legally responsible for what happens to their companies, but that's largely a myth because the pertinent law doesn't really hold their feet to the fire, says Mr. Gillespie. Even if it did, how much can directors rock the boat when at nearly two-thirds of America's largest companies, the CEOs are also chairmen of the board and run the board meetings?

Can shareholders revolt? Short of the expensive process of filing suit, their only recourse is to abstain from voting. They can't even vote against a director at annual shareholder meetings.

Gillespie and coauthor David Zweig, who co-founded Salon and has worked at Time Inc. and Dow Jones, suggest some two dozen reforms that could go a long way toward creating effective boards. One of them – creating a pool of trained outside directors – was first proposed in the 1930s and has still not been implemented because of the opposition of the corporations themselves, Gillespie says.

Which would tend to make one less than optimistic about the chances of other real reforms passing. But Gillespie is not pessimistic. "Shareholders are angry but don't know how to direct it." With the new book, Gillespie and Mr. Zweig hope to channel that anger. (Gillespie even stars in his own movie to make the point. Click on it below.)

"If you cured the negligence of boards by changing their nature and makeup, you'd have them doing what they were supposed to do," he says.

And that would be a big start in cleaning up the mess.