... ...

Corporate
Governance

At CNX, we believe that sound governance is the foundation of our Sustainable Business Model, which enables strong performance financially, socially and environmentally. This is why we think G-S-E instead of E-S-G. Sound principles of corporate governance are essential in making good decisions on behalf of our shareholders, employees, stakeholders in the region, and regulatory authorities. As such, CNX Board of Directors provides oversight to the Company’s short and long-term strategic planning and its corporate risk management of all risk scenarios including climate change impact scenarios. Corporate governance addresses topics and policies that relate to transparency, accountability, expectations, and execution; all of which are essential components of a strong and resilient company. A detailed view of CNX’s governance principles, codes of conduct, and Board of Director Committees can be found here.

In 2021, we applied an increased rigor for quality assurance and quality control of emissions reporting to regulatory agencies. We created a Chief Risk Officer position to exercise best-in-class enterprise risk management. And we expanded the executive team to create the most diverse C-suite not just in the industry, but perhaps for all public companies.

Internally, ESG matters are overseen by CNX’s Chief Excellence Officer, who reports directly to CNX’s President and CEO. Performance is based on the evaluation of our stated targets across multiple objectives. Further, CNX’s Chairman of the Environmental, Safety and Corporate Responsibility Committee has formal oversight of ESG issues at the Board of Director level. Matters relating to Corporate Responsibility, including material topics outlined throughout this report, are shared with this committee as deemed necessary but no less than three times per year; and executive management regularly hold review meetings with the committee chair to provide updates on progress between regular BOD meetings.

However, ESG considerations and assessment expand well beyond the traditional structure of a Board of Directors Committee. Material issues are evaluated by subject matter experts, and have clear avenues of elevation to all levels of the Company’s management. Further, CNX is regularly engaged with a variety of industry and basin specific trade associations that consider evolving environmental, regulatory, legal and other material topics.

2021 Governance Highlights:

  • Increased board diversity with the appointment in January, 2022 of Robert Agbede, an ethnically diverse board member with a wealth of varied engineering and business experience
  • Reinforced our commitment to risk management by adding the role of Chief Risk Officer (CRO)
  • Strengthened ESG reporting and disclosure with the adoption of reporting standards from the Task Force on Climate-related Financial Disclosure (TCFD) and the Sustainability Accounting Standards Board (SASB)
  • Enhanced regulatory and environmental compliance data management through the formation of CNX’s Regulatory Reporting Group, led by our new Regulatory Reporting Controller
Legacy Accomplishments
  • No poison pill
  • Free cash flow per-share focus
  • Small, focused board
  • Capital allocation focus
  • Minimum stock holding requirements for executives
  • Environmental, Safety, and Corporate Responsibility Board Committee
  • Vertically integrated natural gas company
Today
  • Low-cost producer
  • Ongoing 7-year financial guidance in line with ESG core transparency principles
  • Continued capital return to shareholders
  • CEO pay for performance; 90% at risk
  • Insider ownership at 2.5%
  • Returning capital to shareholders
  • Reducing debt
  • Reducing dependence on capital markets
Looking Ahead
  • Stepped up capital return to shareholders
  • Exemplar of long-term value creation and transparency
  • More closely held ownership
  • Management compensation tied to methane intensity
  • Growth of business via methane and carbon abatement technologies