2.17 Following legal advice in September 2007, the Treasury considered that it should avoid taking any actions that were properly a matter for the directors of Northern Rock, in effect acting as a "shadow director" or de facto director of the company. If it did so, the Treasury judged that it would have been open to the risk of litigation from third parties in the event that Northern Rock entered an insolvency procedure such as administration.
2.18 The Treasury saw the search for a solution as a matter for the company and its board, which remained in place and continued to be responsible for the management of the company and accountable to shareholders. To do so, the Northern Rock board had co-opted additional directors with relevant skills and had retained independent financial and legal advisers. The Treasury therefore regarded the Northern Rock board as being in charge of the process and acted accordingly, even though large and increasing sums of public money were at risk.