Introduction

By virtue of their law-making powers European Union institutions may enact Regulations and Directives. During the past forty years, the Commission has made extensive use of both these powers particularly concerning company law. Over the course of this time the Commission's actions were accompanied by remarkable changes in its general policy on a number of occasions. Starting off with the idea of a widespread harmonization of the law, this policy was virtually abandoned by the Commission in 1990. However, under the impact of the capital markets and under the banner of Corporate Governance, the Commission discovered its own original policy at the turn of the millennium. One of the key role players in this realignment of the Commission's policy was the so-called High Level Group and their report dated from 4 November 2002. The Commission warmly welcomed this report by the High Level Group, which had in fact been set up by the Commission itself, and implemented a corresponding EU Action Plan. At the same time, the Commission began reviewing further options as to how the proposals made by the High Level Group might be implemented as law in a form other than a Directive. It was during this reviewing process that the Commission came to regard the Recommendation as a viable alternative for the Directive, since they, too, are listed as in Art. 249 (5) of the EC Treaty as an option for action by the Commission.