(FORTUNE Magazine) – WHAT ON EARTH HAS GOTTEN INTO boards? During a brief stretch in March, high-profile chiefs were dropping like bowling pins: Michael Eisner from Disney (a year early), Nobuyuki Idei from Sony, Harry Stonecipher from Boeing, Hank Greenberg from AIG. You don't have to look back much further to note Carly Fiorina getting booted from Hewlett-Packard, Franklin Raines from Fannie Mae, Christopher Milliken from OfficeMax, and Scott Livengood from Krispy Kreme. There hasn't been this much sacking since the Goths dropped in on Rome. So what does it all mean?

Talk to corporate directors and those who work with them, and the answer is apparent: What's gotten into boards is fear. Certain developments have scared the living daylights out of them, leading them to dispatch CEOs far more readily than before--and the trend will likely accelerate before it slows.

The most potent fear now affecting directors is the most personal. It's the fear of losing all their money. A couple of recent lawsuit settlements were boardroom earthquakes. Large institutional shareholders sued the directors of Enron and WorldCom over their roles in the collapse of those firms, and both settlements called for the directors to pay large sums from their own pockets. A court later threw out the WorldCom settlement but did not reject the idea of personal liability.

In the world of directors, that is simply not supposed to happen. Almost every company maintains directors' and officers' (D&O) insurance. But the plaintiffs in those lawsuits insisted that the directors pay personally; the extraordinary conduct alleged in the suits may not have been covered by the policies anyway. Result: For the first time in memory, directors can lose everything because they serve on the board of a company that goes wrong.

The same personal disaster could happen even if a company or its leaders have done nothing illegal. The highly publicized lawsuit against Disney's directors over Michael Ovitz's severance pay is the case to watch. No one has alleged fraud, just utter cluelessness and laxity. If the judge's decision goes against the directors, Disney's D&O insurance might not cover any damages awarded. The directors would then be on the hook personally.

It isn't just the threat of ruin that's making directors hypervigilant. Merely being on the board of a badly troubled company is frightening enough, since it can decimate a director's earning power for years. Serving on the board of Enron or HealthSouth is no résumé enhancer.

One could argue that nothing is new here--fear has always motivated directors, who don't want to lose a prestigious gig that has traditionally paid well for modest work. What has changed is that the workload has increased--and so has the degree of fear they feel. The first great eruption of board assertiveness was in 1992, when directors fired the CEOs of such iconic companies as IBM, General Motors, and American Express. Then, the fear was of shame and embarrassment; IBM could have been taken over, for example, and GM almost filed for bankruptcy. During the '90s economic expansion and bull market madness, fear went into hiding. Now it's back.

That's a welcome development for many people, such as headhunters. The obvious reason is that whenever a CEO gets fired, a replacement has to be hired. The less visible reason is that boards are increasingly hiring search firms even when they have well-qualified internal candidates. So, for example, the Disney board hired Heidrick & Struggles, which evaluated Bob Iger, the insider who got the job, on the same basis as the outside candidates. "I've never before seen the enormous tendency for companies to retain us to provide options to internal candidates who seem acceptable," says Heidrick senior chairman Gerry Roche, "but they want to show they're discharging their responsibilities."

Roche and his competitors may be busier than ever this year. CEO turnover seems likely to increase, whether because of legal issues or tougher governance (see following stories). First, many CEOs may decide themselves to hang it up. "They're burning out," says Tom Neff, chairman of U.S. operations at SpencerStuart, a headhunting firm. With the economy strong and the Dow back near its all-time high, a CEO's best strategic move now may be to Palm Beach. A prominent CEO who asks not to be named says, "You'll be surprised by the number of CEOs who retire this year."

Second, the fear factor sparked by government investigations is growing. Eliot Spitzer is on the prowl, and the conviction of Bernie Ebbers only adds to director anxiety. There's just nothing good about overseeing a CEO during the period when he committed nine serious federal crimes. Directors will try harder than ever to avoid that scenario--which surely means, among other things, more CEOs getting knocked down.

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