from the EDITOR.

Service on corporate boards is a privilege, and one that seems to be getting harder to come by as boards shrink. Even long-time directors may find themselves losing their seats when companies merge and the resulting entity finds it has to cut to keep its new board from being huge and unwieldy.

As our cover story package points out, this shrinking process is paring the number of inside (company managers) directors -- making it increasingly unlikely that the company CFO has a seat at the big table. But top financial officers will be making their way onto outside boards as experts chosen for auditing committees, which are being monitored more closely these days by the Securities and Exchange Commission and the various U.S. stock exchanges.

Director activities represent another good example of how the winds of change in the greater business world have altered long-time practices. It's no longer considered acceptable for major companies to cobble together a board from the CEO's golfing or fishing pals, and active recruitment of women and minorities has been underway for years. Directors are expected to be better prepared and carry more responsibility; snoozing at the table (literally or figuratively) is taboo. Many of these changes are the result of long and sometimes noisy campaigns by shareholder activists and institutional investors who have railed at the prevailing status quo -- particularly when company performance has declined.

The problems of managing overseas subsidiaries have been in the news a lot lately, coming both from American companies like Xerox and foreign multinationals like Lernout & Hauspie Speech Products and DaimlerChrysler AG. Writer Paul Sweeney looks at some of the problems that have cropped up and talks to consultants and others about how companies can avoid some of the pitfalls posed by distance and by doing businesses in countries -- especially in the developing world -- that might not have the same ethical or financial standards we have in the U.S.

For an inside look at the biggest pharmaceutical merger ever, we asked Pfizer Inc. CFO David Shedlarz to reflect on the deal with Warner-Lambert Co., now a year old. As Shedlarz, an FEI member, notes in an interview, the transaction required a quantum leap for Pfizer and for himself as a manager.

Is the promise of application services providers (ASPs) being met? Tim McCarthy, an executive with Agilera, suggests that CFOs look closely at the different models out there and choose carefully, paying particular attention to return on investment. Areas like "soft costs," he notes, require genuine scrutiny.

Finally, in a pair of profiles, we introduce the new chairmen of FEI and FEI Canada, David Young and Dereck Millar. The two are long-time leaders in their respective organizations and share a similar goal -- narrowing the often-elusive gap between the national entity and the chapters. As Young says, "Communication is key, and there are no easy answers." But if commitment from the top is any indication, it's an issue that will get a lot of attention in the coming year