(FORTUNE Magazine) – Michael Eisner has been rebuked by his own shareholders, scorned by Wall Street, and beaten up in the press. He is fighting both a takeover bid from Comcast and a dissident ex-director named Disney. He's in trouble. But the 62-year-old CEO retains the support of one key group--the directors of the Walt Disney Co.

That the board of directors remains pro-Eisner won't surprise anyone familiar with its reputation. Glass Lewis, a proxy-advisory firm, recently described the Disney directors as "notoriously insular, famously gullible, and blindly loyal to Mr. Eisner." Disney directors may be loyal, but they're not blind. Nor are they patsies anymore. Indeed, power at Disney is gradually shifting from the CEO to the board, which now must find a successor to Eisner and fend off criticism of the man they have just elected their chairman: former Senator George Mitchell, whose record as a corporate director is pretty dismal.

The board's current thinking goes something like this. Eisner, whose contract runs out in September 2006, deserves more time to show that the turnaround at the $28-billion-a-year entertainment giant is real. Earnings are up lately, as is the share price. Projections are for a 30% increase in operating income this fiscal year and double-digit increases through 2007. "As the CEO, Michael has the support and confidence of the board," says one director. "But he better make his numbers." If the turnaround sputters, watch out.

That raises the most important question facing the board: If not Michael, then who? Succession was already on the agenda for the board's next meeting, a two-day retreat in April at Disneyland. Following the stunning 43% no-confidence vote against Eisner, the topic has taken on a new urgency.

Bob Iger, Eisner's No. 2, is the most obvious candidate. Iger, 53, has the personal qualities Eisner lacks. He is low-key, self-effacing, and well liked inside and outside the company. But his task has been to fix ABC, which remains mired in fourth place among the networks. To promote Iger would be to reward failure.

Peter Chernin, 52, president of News Corp., is another name that will come before the board. But his close association with Rupert Murdoch and the occasionally tawdry fare at Fox television hurts his chances. The Disney directors don't want to entrust Mickey Mouse and Donald Duck to the executive who gave us When Good Pets Go Bad.

Steve Jobs, the CEO of Apple and Pixar, has neither the desire nor the ability to lead Disney. Viacom's Mel Karmazin loves the advertising business; he does not want to run theme parks or a movie studio. Former Warner Bros. studio chief Terry Semel, now at Yahoo, is a strong candidate, but he may be too old at 61.

That leaves a trio of former Disney executives: eBay CEO Meg Whitman, Gap CEO Paul Pressler, and Steve Burke, who is second in command to Brian Roberts at Comcast. Whitman would be applauded on Wall Street and on Main Street. (Lots of Disney stuff is bought and sold on eBay.) She has built a great corporate culture from the ground up at eBay, and her collegial, generous management style would be welcomed inside the Mouse House. Whitman tells colleagues that she loves eBay, but the opportunity to rescue Disney might be hard to resist.

Eisner won't be asked to stay beyond his current contract. But former directors Roy Disney and Stanley Gold, who ran the "vote no" campaign, don't want to wait that long. Neither do many of the institutional shareholders. "His performance has been poor, and he has been given enough time," says Christy Wood, senior investment officer of Calpers. "The directors need to separate themselves from him, or they are going to go down with him."

Some shareholders are equally outraged by the elevation of Mitchell. The former Senator was a director at Xerox during a period when management was accused of manipulating financial results and refusing to cooperate with government investigators. (Six Xerox officials later paid $22 million in fines to settle SEC charges that they allowed the company to overstate its profits by $1.4 billion over four years.) He was a director of Staples when the directors agreed to a controversial scheme to sell back their shares in Staples.com to the company at a hefty profit. (They dropped that idea after shareholders sued the board.) He was a director at U.S. Technologies, a now-defunct Internet company whose CEO was indicted on criminal charges of securities fraud. (Former FBI director William Webster had to give up a federal appointment because he chaired the board's audit committee.) Mitchell also was the well-compensated vice chairman of a company called Oily Rock Group Ltd., created by Victor Kozeny, the so-called pirate of Prague, who has been accused of bilking U.S. investors of hundreds of millions of dollars in an overseas oil deal. (See "The Incredible Half-Billion-Dollar Azerbaijani Oil Swindle," on fortune.com.) Finally, Mitchell is a defendant in the shareholder suit against Disney over its $140 million payout to Michael Ovitz. (Stanley Gold and Roy Disney are also defendants.) About 24% of Disney shareholders withheld their votes for Mitchell as a returning director.

Mitchell could not be reached by FORTUNE, but he told the New York Times that his record at Xerox and Staples does not disqualify him from being chairman of Disney. No, but it won't reassure shareholders either.

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