Fighting the Good Fight

CNX CEO debriefs on Company’s commitment to good corporate governance and tangible shareholder value

May 5, 2023

By Nick DeIuliis, President & CEO, CNX Resources

There are often two speeches prepared in response to an outcome for an important event: one in the case of victory and one in the case of defeat. For CNX, when it comes to the recent battle over a misguided shareholder proposal, we didn’t need two because this is about taking a stand for good governance, legitimate shareholder interests, and the employees and communities of Appalachia.

Rather than following the traditional corporate playbook, we fought the good fight against an increasingly politicalized shareholder engagement process. Call it unconventional, but our tenacious refusal to produce yet another report on an inapplicable issue is what’s truly providing value to our stakeholders.

The ethical and moral victory was won the moment we decided to stand for our values – and before any votes were cast.

Our proactive advocacy over the past month created a wellspring of pride: Hundreds of employees became engaged and are fired up. Local leaders throughout the energy and manufacturing sector “love how [CNX stood] up to these entities, it’s about time.” And, as it was made final during today’s Annual General Meeting, more shareholders voted with us, landing on the right side of this fight, than against us. In my more than 30 years in the industry, this achievement is one of the proudest moments I’ve been lucky enough to be associated with.

While discrete engagement on this particular issue has come and gone, it’s not the end because the root problems remain. Politically motivated actors still don’t know CNX, and they certainly don’t know or understand the needs of the Appalachian region.

We’ve done our best to provide clarity and transparency through numerous communications above and beyond traditional disclosures, yet the opportunistic actors still don’t get it, or even want to. Perhaps because that was never the point.

So, what are we left with?

A proposal regarding a matter that we clearly do not engage on from a lobbying standpoint
A proposal crafted and advocated by a third party with no stake in the future of the company or that of the Appalachian region
More bureaucracy and paper pushing that provides no shareholder value whatsoever
A broken capital markets ecosystem that allows this brand of ideological issue advocacy
A prime example of politics being injected into the ESG engagement process

Our key stakeholders and values were used as pawns – including our employees, the region, and our owners. Our legitimate governance process was politicalized. The environment was not improved nor was our business strengthened by the proposal. But an ideologically motivated third party who doesn’t own a share of stock in CNX walks away with its interests advanced.

That is a sad commentary, but we did right by all those key stakeholders important to CNX. And our shareholders overwhelmingly agreed.

To end where we began, I’m proud of the way our team responded, the way our employees and the wider industry coalesced, and I am left with hope that more will take note and help push back against such abuses in the future.