Corporate Responsibility

CULTURE, COMMUNITY AND RESPONSIBILITY

A core mission of the Company’s employees, executive leadership and Directors is active engagement with not only the Company’s customers, but the civic institutions, non-profits, schools and other organizations that comprise the communities where we live and work. As an organization that is community based, we are committed to supporting volunteerism, implementing environmentally sound practices, working with small businesses, and serving the broad financial service needs of the communities in our geographic markets. We are proud of the industry recognition we continue to receive, including being named in 2023 as the 6th Most Trustworthy Company in America by Newsweek Magazine and one of America’s Best Banks and One of the World’s Best Banks by Forbes Magazine. In addition, we recognize that the development and support of the Company’s human capital is an essential element of the Company’s success. We are focused on furthering our corporate responsibility strategy in alignment with our business and evolution of important topics across the banking industry. In 2023, we engaged a third-party advisory firm to assist the Company with its continued focus on its corporate responsibility strategy and formed a Corporate Responsibility Committee to increase emphasis on corporate responsibility and to implement certain strategies identified by the advisor and adopted by the Company’s senior management.

Recent highlights of the Company’s commitment to corporate social responsibility and support of our communities and employees include:

 Human Capital Initiatives

•  In 2023, the Company adopted its Culture and Diversity Strategic Pillars of culture, recruitment, learning, policy and practice, and communication to implement strategic initiatives across the enterprise in an effort to deepen the appreciation of each other’s unique contributions to the Company while creating improved individual wellbeing and organizational results.

• The Company continued to leverage the “MyVoice” program, a Company-wide program to enhance employee satisfaction and engagement. The goal of MyVoice is to foster a culture of open communication and feedback to enhance our employee experience making Community Bank a best place to work. In 2023, the Company also repositioned its performance management review process to provide ongoing and more frequent feedback in order to achieve higher performance, engagement and commitment to improve outcomes and productivity.

• In 2023, the Company’s Culture and Diversity Council continued its initiatives on culture and diversity across the areas of talent acquisition and retention, employee community service spotlights, and unconscious bias awareness. The Council engaged our workforce in advancing diversity initiatives and identifying future initiatives.

• The Company developed future leaders through its leadership programs to strengthen our succession and leadership capabilities, as well as reinforce our commitment to promote from within. Over 113 leaders participated in these programs in 2023.

Supporting our Communities

• In 2023, the Company appointed a Director of Community and Corporate Relations. This new role reflects the importance to our entire organization of investing in our communities to support the well-being and sustainability of those places where we all live, work, and raise our families.

• In 2023, the Company donated more than $3.7 million to over 2,000 charitable organizations in the Company’s footprint.

  Our employees volunteered 16,000 hours of their time to over 900 non-profit organizations in 2023, including those dedicated to underserved and disadvantaged communities.

• In 2023, the Company pledged $250,000 to the Growth + Equity Fund (“G+E Fund”) at the CenterState CEO Foundation specifically earmarked to support entrepreneurs of color, women, veterans, new Americans and those with low to moderate incomes, providing them access to flexible capital with borrower-friendly terms to facilitate the growth of their businesses.

• The Bank offers financial literacy programs geared towards students and adults, including programs offered in elementary and high schools and, in collaboration with our community partners, programs focused on adults in lower and middle income communities.

• We continue to expand our digital banking services to include powerful, flexible and easy to use technology, including the addition of a complimentary credit monitoring service, in order to enhance the digital banking services provided to our customers.

• The Company continues to participate in the Upstate Minority Economic Alliance, the only Minority Chamber of Commerce in the Upstate New York Region, and in 2023, further supported the organization through providing meeting space and holding clinics in order to strengthen its relationship with member businesses and expand the pool of diverse clients and potential vendors for the Company and its financial subsidiaries.

Environmental Sustainability Initiative

• The Company engaged an outside advisor to assist management in identifying corporate responsibility priorities and initiatives in order to support a healthier, more sustainable future for our stakeholders including our investors, employees, communities we serve, and customers. The Company established the Corporate Responsibility Committee lead by the Senior Vice President of Risk Management and consisting of members of the Company’s and Bank’s management team with the responsibility of executing on such priorities and initiatives.

• The Company invested $5,000,000 in a solar tax equity fund to participate in regionally-based small- to mid-size solar projects primarily designed to promote public welfare, including the welfare of low- and moderate-income communities or families.

• The Company analyzed HVAC systems, air quality, and energy efficient systems in connection with the build out of the Company’s new headquarters in DeWitt, New York with the goal to create an energy efficient and healthy space for our employees to work.

Corporate Responsibility
The Company recognizes the continuing importance of corporate responsibility and continues to further our corporate responsibility strategy, including environmental, social and human capital, and governance initiatives, in alignment with our businesses. We understand that a thoughtful, coordinated approach to our corporate responsibility obligations will support a healthier, more sustainable future for our stakeholders including our investors, employees, communities we serve, and customers. We expect to build upon our core values as a community financial institution and our core mission of serving the financial needs of our communities. We expect our developing corporate responsibility strategy will align with the nature and scale of our business in respecting the environment and the evolution of corporate responsibility principles in our industry.

In 2023, the Company formed the Corporate Responsibility Committee made up of key members of the Company’s and Bank’s senior management to formulate ways to advance the Company’s corporate responsibility goals across the enterprise. Some of our specific efforts and commitments regarding our environment, our people and our community for 2023 and 2024 are summarized below.


COMMITMENT TO OUR PEOPLE - HUMAN CAPITAL INITIATIVES

We recognize that our people are essential to our success and are committed to supporting the development and well-being of each individual in a collaborative and inclusive environment.

Commitment to Our Core Values. The Company continues to commit to our set of core values to guide our employees and exemplify our commitment to each other, our customers, our Shareholders, and the communities we serve:


These core values represent the Company’s focus on people – our customers, our communities, our Shareholders and each other and serve as the foundation that supports and drives the corporate responsibility initiatives below.

Commitment to Culture and Diversity. The Company is committed to fostering a diverse and inclusive environment where there is a sense of purpose, belonging, and work ownership driven by our core values and service to our customers. We aspire to empower our workforce to achieve their full potential and in 2023, our Culture and Diversity Officer introduced our Culture and Diversity Strategic Pillars and Initiatives set forth below. These strategic pillars support our commitment to knowing, respecting, and leveraging each person’s unique talents, which helps to respect diversity of thought and drive impact within the organization. We have found that focusing on strengths deepens the appreciation of each other’s unique contributions and improves individual wellbeing and organizational results.

Watch this video to learn more about our Culture and Diversity Council from Maureen Gillan-Myer, EVP Chief Human Resources Officer of the Company and Freddie Jacobs, NRS, Chief Operating Officer of Northeast Retirement Services, LLC, the Company's subsidiary.

Click here to see more about our Culture and Diversity Council and its current initiatives.

Alignment of Management Incentive Objectives with Goals. The Compensation Committee is responsible for the oversight of the Company’s human capital management, including regular review of the Company’s management resources, culture and diversity policies, succession planning, and talent development programs. In order to demonstrate the Board’s commitment to achieving the Company’s culture and diversity goals, the Compensation Committee, in reviewing the Company’s human capital management programs and management’s objectives for 2023, included a specific performance objective in the 2023 Management Incentive Plan tied to the acceleration of manager accountability for engagement. In 2024, the Company again included a performance objective in the Management Incentive Plan tied to advancing the Company’s executive leadership program, providing leadership opportunities for the graduates of that program, identifying emerging leaders in the Company and creating development plans for each.

Commitment to Employee Engagement – Implementing “MyVoice Program”.  The Company is committed to creating a top tier workplace filled with highly satisfied and engaged employees. The Company believes that open and honest communication among employees, managers and executive leadership fosters an open and collaborative work environment where everyone can participate, develop, and thrive. In 2021, the Company launched the first company-wide employee engagement survey called “My Voice”. Thereafter, and continuing in 2023, the Company has made concerted efforts to make improvements, including developing a network of Engagement Champions across all of our business areas, to support our leaders and managers to further the My Voice efforts across the organization and surveying employees again in late 2023, with 77% of the Company’s employees participating, indicating that our employees feel heard and want to provide feedback to the Company. In January 2024, the latest survey results were reviewed with business unit leaders, managers, and employees. As leaders across the organization remain engaged, the My Voice initiative contributes to achieving higher performance, engagement, and commitment to improve outcomes and productivity.

Commitment to Fair Play. The Company’s compensation philosophy includes elements that reinforce our values, rewards our colleagues and maximizes long-term performance. We use various measures to ensure our colleagues are paid fairly based on the job that they hold and their performance in that role. In 2023, we continued to conduct targeted workforce planning sessions across all our business areas to ensure market competitive pay and staff development actions that support our commitment to the development of our employees. In further commitment to pay transparency and fair pay, the Company, beginning in September 2023, took a proactive approach and included the minimum and maximum annual salary or hourly pay range when advertising a job, promotion, or transfer opportunity in all internal and external job postings regardless of the state or location of the position.

Commitment to Talent Management and Employee Development. The Company offers a wide range of learning and development programs that support a broad scope of the Company’s talent development initiatives, making continuous learning a part of each employee’s relationship with the Company in a growth-oriented environment. These include a tuition reimbursement program for employees who wish to further their education with college courses. In 2023, the Company invested more than $63,000 to support these employees’ educational goals. In addition, the Company has developed a college partnership program, which offers discounted credits to employees via online courses and online certifications.

Leadership and Professional Development Opportunities and Review Process. The Company offers leadership and professional development opportunities to develop its employees and strengthen its leadership pipeline, improving employee engagement, workforce effectiveness, and organizational leadership. Various growth focused learning programs include, coaching sessions to leverage individual strengths and address behavioral competencies; career-path roadmaps aligned with career goals/progression; and a cloud-based E-Learning platform to increase efficiency and effectiveness. In 2023, 113 leaders participated in one of our 11 professional development workshops that were offered. In addition to learning and development programs, in 2023, the Company also repositioned its performance management review process to provide ongoing and more frequent feedback in order to achieve higher performance, engagement and commitment to improve outcomes and productivity.

Commitment to Employee Health & Wellbeing. The Company is committed to providing tools and resources to support employees’ overall health and wellbeing. This includes offering a variety of health and welfare benefits as well as a holistic wellbeing program that offers financial incentives for participating in the wellbeing programs. In 2023, through this program, the Company provided $770,800 in discounts on employee medical plan premiums and incentive dollars that employees could redeem for items within the wellbeing program’s store.

Click here to see more information about our “Work Happy” Mission and our commitment to our employees by providing the highest level of employee support, whether through our benefits, our professional development or our challenging but rewarding professional experiences.

COMMITMENT TO OUR COMMUNITY AND THE ENVIRONMENT

We continue to develop our corporate responsibility strategy and look for opportunities to integrate sustainability and corporate responsibility into our business practices with the intent to deliver community focused products and services while creating long-term sustainable value for all of our stakeholders. Set forth below are some of the environmental and community initiatives we focused on in 2023 and early 2024:

Engaged Third Party Advisor to Assist with Corporate Responsibility Strategy. In 2023, the Company engaged a third-party advisory firm to assist the Company with evaluating its corporate responsibility strategy and to focus its resources to identify and execute environmental, social, and human capital initiatives that are essential in driving success for our stakeholders, including our Shareholders, customers, employees, third-party vendors and the communities we serve.

Creation of the Corporate Responsibility Committee. In 2023, the Company’s executive management team established the Corporate Responsibility Committee, which is chaired by the Senior Vice President of Risk Management and consists of senior members of the Company’s and Bank’s management team, with the goal to identify and execute on corporate responsibility initiatives.

Appointment of Director of Community and Corporate Relations. In 2023, the Company enhanced its commitment to investing in our communities by appointing the Company’s first Director of Community and Corporate Relations. This new role reflects the importance to our entire organization of investing in our communities to support the well-being and sustainability of those places where we all live, work, and raise our families. This position will have responsibility for developing deeper priorities and strategies around how we invest in our communities, including financial support, volunteerism and other means of engagement.

Focus on Vendor Policies and Sustainable Business Operations. The Company holds itself to a standard of integrity, professional conduct, and environmentally responsible business practices. This allows us to establish trust with our employees, customers, stakeholders, and vendors. We expect the same level of commitment and conduct from our vendors as we focus on ensuring that we are operating in a socially responsible manner. As part of its vendor management program, the Company is exploring ways to increase the pool of vendors who are minority owned or have a history of creating opportunities for minority, disadvantaged individuals or Veterans, or otherwise address the needs of underserved populations or communities. As part of this effort, the Company continues to participate in the Upstate Minority Economic Alliance, the only Minority Chamber of Commerce in the Upstate New York Region, in order to leverage partnerships to expand the pool of diverse vendors. In 2023, the Company and its financial subsidiaries further supported the organization through providing meeting space and holding clinics in order to strengthen its relationship with member businesses.

Our vendor management policy has provisions that appropriately respond to vendors where we identify that their practices do not align with our principles regarding operating in a socially responsible manner, including fair labor standards, acting responsibly with the security and confidentiality of our customer information, engaging in responsible business practices and acting consistently with our codes of conduct and ethical behavior.

Commitment to Helping Others. We remain committed to strengthening the communities we serve through employee volunteerism and corporate engagement and support with a focus on serving those who are underserved in the local communities where we do business. We do this through financial support, in-kind donations, community engagement, and volunteer service. In 2023, the Company made over $3.7 million in donations, grants and sponsorships in the Bank’s footprint of Upstate New York, Northeast Pennsylvania, Vermont and Western Massachusetts. Our employees also gave generously of their time and expertise by donating over 16,000 volunteer hours during 2023. They actively participated in over 900 causes and organizations, with employees serving on the boards and committees of over 500 community charities and organizations and supporting these organization in other ways.

In addition to volunteerism, the Bank offers programs that supports its customers and neighbors. For example, in response to various natural disasters that impact our communities, the Bank from time to time offers disaster relief programs to assist customers with repairing property, cleaning up, and getting back on their feet. In 2023 when a flooding disaster shut down entire communities in Vermont, the Company provided recovery assistance in several important forms to businesses and people in its footprint. The Company contributed $100,000 for grant purposes for businesses affected by the disaster. Additionally, the Company donated to area food banks, and provided drinking water in three of its branches in communities where access to drinking water was difficult to access.

Click here to see more information about our Community Involvement initiatives and our most recent Community Report.

Commitment to Community-Focused Mortgage Banking. For more than 150 years, the Bank has focused on serving the financial needs of its customers. The Bank offers several lending programs sponsored by state and federal agencies designed to encourage first time home ownership, affordable home mortgages for those in lower and moderate-income groups, and mortgages for those living in rural areas that would not be eligible for traditional mortgage products. The Bank ensures its mortgage marketing efforts extend to those who live in economically disadvantaged areas within its geographic communities. In addition, the Bank offers mortgages with up to 90% loan-to-value ratios without the requirement of mortgage insurance (typically required in loan-to-value ratios over 80%), and a “No Closing Cost” mortgage product that facilitates the ability of borrowers to attain home ownership with a product that provides for the Bank to absorb mortgage related closing costs, such as filing fees, bank legal fees, appraisal, application, and underwriting/processing fees, provided that the borrower does not prepay the mortgage within three years of the closing. The Bank also provides community development lending products such as Veteran Administration mortgages to create a broader pool of borrowers and help make home ownership possible for borrowers who may not qualify for traditional mortgages.

Commitment to Underrepresented Communities and Low and Moderate Income Households. During 2023, the Bank made $161.4 million of mortgage loans to low-and moderate-income households in order to enable sustainable homeownership which is a major vehicle for building wealth and economic opportunity. In addition, the Bank offered a special purpose credit product to underrepresented communities, including borrowers in minority and low-to-moderate income areas in Buffalo, Rochester, and Syracuse, New York that assisted 107 customers in 2023 to obtain residential mortgages on favorable terms and will again offer the program in 2024.

Financial Literacy Programs. The Bank’s staff provides financial literacy programs within the Bank’s footprint with the goal of promoting financial literacy and access to financial services and products. The Bank offers financial literacy programs in which employee volunteers present lessons to adults and children in both classrooms and with non-profit organizations focused on adults in lower and middle income communities on topics ranging from making spending decisions to budgeting and the importance of savings. In the Adirondack New York region alone, employees presented 19 types of financial literacy classes to more than 700 students in 2023.

Commitment to Supporting Local Businesses and Communities. The Bank’s commercial lending professionals are dedicated to servicing business owners in under-served markets within the Bank’s footprint with the goal of providing access to financial services and products. The Bank continues to focus on the expansion of its Business Banking group to offer credit support up to $2,000,000 as well as a greater portfolio of small business banking services. Because small businesses are engines for our local economies by keeping money close to home and supporting neighborhoods and communities, the Bank also works with government agencies to offer lending programs to small businesses and agricultural loan products. The Bank has financed community development projects that help enrich and revitalize the communities where it operates, including financing for health care facilities, solar energy companies, farming operations, addiction counseling services, places of worship, ambulance companies, and community theaters. The goal of all of these efforts is to provide support and opportunities to cultivate robust communities for the Company’s customers, employees, and stakeholders. In addition, the Bank is a member of the Upstate Minority Economic Alliance in order to cultivate the Bank’s relationship with minority owned small businesses and provide better access to financial services and products for such businesses.

In 2023, the Company pledged $250,000 to the G+E Fund at the CenterState CEO Foundation specifically earmarked to support entrepreneurs of color, women, veterans, new Americans and those with low to moderate incomes, providing them access to flexible capital with borrower-friendly terms to facilitate the growth of their businesses.

Protecting our Customers’ Data. We are committed to providing a high level of customer care including measures to safeguard our customers’ data. The Company has developed a cybersecurity program and framework which is administered by a team of experienced professionals, including the Company’s Chief Risk Officer and Chief Information Security Officer (“CISO”), and supported by external technology and consulting services. The Company’s Risk Committee, which is made up of the entire Board of Directors, is responsible for the oversight of the cybersecurity program. Directors Ms. MacPherson and Ms. Skerritt have cybersecurity oversight experience and have received the Cybersecurity Oversight Certification issued by the National Association of Corporate Directors. In an effort to remain vigilant against cybersecurity attacks, the Company further provides annual and ongoing training to all of its employees so that they have an understanding and appreciation of the cybersecurity environment and risks and the Company’s policies to combat such risks. Such training includes annual mandatory training sessions on cybersecurity for all employees, periodic informational notices regarding emerging threats, and periodic testing to ensure employees are reporting suspicious activities and are diligent in their efforts to avoid phishing attacks and cybersecurity breaches. The CISO also conducts and participates in annual table top exercises with management and on occasion, with representatives from the Board, in order to be prepared in the event of a material cybersecurity event.

Improved Digital Banking. The Bank continues to devote significant resources to expand our digital banking services to include powerful, flexible and easy to use technology. Our customers are seeking efficient and convenient solutions to manage their finances and digital banking has emerged as a transformative force, offering a wide range of benefits to busy consumer and commercial customers. In 2023, we enhanced the consumer digital banking platform with the addition of a complimentary credit monitoring service to provide our customers a convenient way to make routine credit checks available in order to assist them with seeing where their credit stands, spotting problems that could suggest identity theft or fraud, and enabling them with information to take measures to improve their credit scores.

Ethical Business Practices and Balancing Business Risk. Our Code of Ethics and the Code of Conduct make clear our expectations for the conduct of our Directors, officers and employees. We recently amended the Code of Ethics to clarify the Company’s commitment to compliance with anti-corruption and anti-bribery laws. As of March 22, 2024, the Company has not been fined in connection with any violation of any anti-corruption or anti-bribery law. We ensure compliance with these Codes through training and monitoring so that we can maintain our track record of business success based upon the highest level of ethics and professionalism. Our banking employees are required to complete online training and testing to verify their understanding of the legal requirements, including training on unfair, deceptive or abusive acts and practices, fair lending, and anti-money laundering.

Our risk management team, with Board oversight, carefully monitors Enterprise Risk Management. The risk management process includes active engagement among different areas of the Company. This combined with oversight by various Board Committees ensures that risk management is supported by appropriate information gathering and monitoring.

Investment in Solar Tax Equity Fund. We invested $5,000,000 in a solar tax equity fund to participate in regionally-based small- to mid-size solar projects primarily designed to promote public welfare, including the welfare of low- and moderate-income communities or families.

Other Environmental Initiatives. The Company supports environmental and sustainability objectives by encouraging recycling and responsible waste management practices throughout the organization. We continue to evaluate opportunities to reduce energy consumption in areas such as facilities, equipment, and operations by moving to more efficient equipment, HVAC systems, lighting and use of technology solutions to reduce our energy usage. The Company is focusing on the use of improved lighting in the build out of its new DeWitt, New York headquarters and the new branch locations that it will open during 2024 and 2025. We recycle all of our electronics through appropriate channels to ensure that harmful substances do not pollute the environment, and in 2023, we recycled 66,000 pounds of electronic equipment. We continue to migrate our data to additional secure, cloud based solutions which minimize the energy use at our data and disaster recovery centers.

The Company has an ongoing initiative to eliminate paper from its work streams and move to completely digital documentation in its business activities where possible. The Bank provides and encourages the use of digital banking and e-statements to its customers, has expanded the use of online platforms for account opening, lending products, communications, remote deposit capture, and various statements and notices. We expanded the digital workflows and robotic process automation technologies in our internal operating and administrative systems, including the migration of mortgage documentation to a fully digital documentation and storage process. In 2023, the Bank saw a 13% increase in customers using its online banking platform.

CORPORATE GOVERNANCE

We are committed to strong corporate governance policies, practices, and procedures designed to make the Board more effective in exercising its oversight role. The following section provides an overview of the Company’s corporate governance structure, including key governance documents that guide the Board and management in the performance of their duties which are regularly reviewed by the Board.

Click here to see our Annual Proxy Statement for more information about our corporate policies, practices, and procedures.

BEST PRACTICES

The Board and management regularly review best practices in corporate governance and are committed to a structure that fosters principled actions, informed and effective decision-making, and appropriate monitoring of risk, compliance, and performance. The Governance Committee is responsible for the review and oversight of the Company’s corporate governance practices and is responsible for updating the Board on best corporate governance practices.

The Company is dedicated to being a financial industry leader in corporate governance and business ethics. The Board is composed of independent Directors, other than the current and former CEOs, with diverse backgrounds who bring a wealth of knowledge and business experience to the Company. The Company has significantly increased the Board’s ethnic and gender diversity and the level of identified skill sets over the last several years. We will continue to consider a diverse pool of candidates in our Director nomination process to further enhance the diversity on the Board and add appropriate skills and experience in connection with succession planning at the Board level.

 

From the top down, the Company is committed to fostering an effective risk management environment to serve the interests of the Company, its customers, and its Shareholders. The Board has adopted the Code of Ethics and the Code of Conduct to make clear its expectation for the conduct of our Directors, officers and employees. The Company ensures compliance with these Codes through training and monitoring so that the Company can maintain its track record of business success based upon the highest level of ethics and professionalism.

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