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Select Committee on Treasury Written Evidence

Letter from the Chairman of Northern Rock to the Chairman

  Thank you for your letter of 21 November. I set out to create a Board fit for the immediate purpose of discovering the options available to Northern Rock and implementing the chosen solution in the best interests of the creditors, shareholders, employees and other stakeholders. I decided that a smaller committee Board prepared to meet frequently and work with intensity for some weeks/months was needed. Public spirited NEDs with an appropriate skills mix and a track records for delivery were sought. No easy task in the circumstances but I think with the addition of Messrs Devaney, Laffin and Adams we have done well. No financial payouts or incentives have been given to the four non-executive directors who retired from the Board on 16 November 2007.

  Executive Directors: in order to reduce the total Board numbers to eight with a majority of NEDs available for all meetings at short notice, I decided to reduce the Executive Directors to two, ie the postholders of the CEO and CFO positions.

  At the time of writing, no settlement has been agreed with Mr Applegarth and it would be therefore be too early to reply to your question other than to say that in the case of Messrs Currie, Baker and Kuipers, they currently remain in employment but have given up Board membership.

  I have not yet had time to agree terms for executive directors beyond those already in place. I will advice the committee once agreement has been reached. I can assure you that we have no intention of instituting large bonuses or payouts but contractual obligations will of course be honoured.

6 December 2007

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