After the stock market carnage of the past two years, it's a tough assignment for companies: Win back suspicious and skittish investors. Though a recent stock market rally has helped dull some of the pain, investors are still stinging from their deep and unexpected losses in the stock market over the past two years.

If you were a Lehman Brothers or Bear Stearns shareholder, it's hard to forget the lesson you learned in 2008. Executives at those firms continued to reassure investors just days before things imploded. "How could your business be O.K. one week and finished the next?" asks Erick Maronak, who manages the Victory Large Cap Growth fund (VFGAX).

But it's not just these spectacular failures that disappointed shareholders. Investors complain of firms that took on too much debt or too much risk, or companies that handed CEOs who had been fired $100 million packages on their way out the door. Investors relying on income from equities feel especially let down: Nearly one-fifth of the companies in the Standard & Poor's 500-stock index have either cut or eliminated dividend payments since the start of the recession in December 2007. CEOs have been blamed: According to Challenger, Gray & Christmas, 616 public company chief executives have left their jobs since the start of 2008.

Boards Gone Missing But never mind the CEOs, many burned shareholders wonder where were the boards of directors, who are supposed to be watchdogs representing them? "If that's the ideal, it's certainly drifted a long way off course," says John Merrill, chief investment officer at Tanglewood Wealth Management in Houston. "Boards of directors were either too tied into management or too lazy to do the independent research."

Not everyone agrees that corporations deserve such widespread criticism and skepticism. "The sins of the few have been visited on the many," says Lizanne Thomas, who heads the corporate governance practice at law firm Jones Day. Mistakes were made by "discrete pockets of industry," she says. "It's important as an investment and money manager that I don't get jaundiced by thinking every CEO is bad," adds Frank Holmes, chief executive and chief investment officer at U.S. Global Investors (GROW).

Still, all agree that companies, innocent and guilty alike, must do more to restore the confidence of investors. Many are already taking first steps, say investors and corporate governance experts. The first order of business, they say, is for companies to upgrade the way they communicate to shareholders. The key is brutal honesty, says Rich Myers, head of the financial communications practice at giant public relations firm Edelman.