From the editor.

With the merger environment largely stagnant around the world, strategic alliances and partnerships have taken on more importance than ever. Obviously, there are plenty of ways in which the best-intentioned alliances can fail -- and it behooves the various parties to think carefully about the implications of how these alliances are structured and the language that binds them together.

In fact, writes author and consultant Fred A. Kuglin, due diligence is perhaps as important to an alliance as it is to a merger. Kuglin describes the assorted categories of alliances and details the documents that alliance partners should be aware of and implement, as needed, to make sure their legal bases are covered.

Audit committee service is getting a lot more challenging, as Sarbanes-Oxley rules start kicking in and financial expertise is becoming a key mandate. Writer Paul Sweeney surveys the current thinking on audit panels, talking to finance executives, recruiters and corporate governance experts and critics alike.

In an interview with Managing Editor Ellen Heffes, Gilbert Mittler, CFO of Brussels-based insurance and financial services giant Fortis, talks about a wide range of subjects, including corporate governance and corporate culture, differences between Europe and the U.S., accounting standards convergence and his industry. Another very different interview features author and noted business thinker Gary Hamel addressing innovation and its importance in keeping companies vital and growing.

Also in this issue: An analysis of corporate divestiture trends from KPMG LLP; a report on early feedback on Sarbanes-Oxley from three public companies; Ellen Heffes' interview with Ernst & Young CEO James Turley; two pieces on managing litigation through document management and arbitration, respectively; an article on how business performance management software can deliver a single version of the financials; and short pieces on two risk areas, accounting fraud and kidnapping.

When we interviewed Vivendi Universal CFO Guillaume Hannezo last spring for an article that ran in the June issue, he painted a picture of a company that, despite some serious challenges, was getting its act together. Unfortunately, it didn't, and within a few months, Vivendi's chairman and CEO, Jean-Marie Messier, and then Hannezo himself were gone.

An investigative story about Vivendi's troubles in The Wall Street Journal in late October (Halloween, actually) made it clear that Hannezo faced nightmarish obstacles trying to rein in Messier's incessant deal-making and stock buybacks -- some apparently even concealed from the CFO and the board. As debt ballooned, Hannezo even directed his staff not to take the CEO's calls. And, as the Journal insightfully pointed out, Hannezo's finance group of a dozen people was dwarfed by Vivendi's public relations and communications staff of 100. Understaffed and overwhelmed by the machinery of what was now a huge corporation, Hannezo's group was often three months behind in analyzing the financials, the Journal reported.

All of which reinforces the notion that in a number of today's most troubled companies, the CFO's watchdog role has been defanged -- with devastating results. When the control function is marginalized, the corporate train may be careening out of control with no brakeman to keep it on the tracks.