BOARD PROCESSES

• Eight of nine SJI Board members are independent as defined by the New York Stock Exchange (NYSE) rules.

• SJI has elected a lead independent director to preside at meetings of independent directors.

• SJI has a Code of Ethics that is applicable to the Board of Directors, all officers and employees. Principal executive officers and financial officers have a specific Code of Ethics related to financial reporting and disclosure.

• SJI Board has adopted Corporate Governance Guidelines consistent with industry best practices.

• SJI Board annually conducts self-evaluations including evaluations of the Audit, Compensation, Corporate Responsibility and Governance Committees.

• SJI Board has a regular orientation program for new Board members and provides ongoing continuing education for all members.

• SJI Board has a formal process for assessing Board competencies and then uses the profile in seeking candidates for the Boards.

• SJI Board conducts executive sessions of the independent and the non-management directors without the Chief Executive Officer (CEO) and management present.

• All Board committees have written charters that have been recently updated to comport with Securities and Exchange Commission (SEC), NYSE rules and corporate governance best practices.

COMMITTEE PROCESSES

• Audit, Compensation and Governance Committees comprise independent members as defined by the NYSE and SEC rules.

• The Governance Committee uses a formalized process which is independent of management for the nominating of new Board members to the full Board.

• The Compensation Committee uses independent consultants to provide expertise and guidance regarding executive compensation.

• The Compensation Committee in conjunction with the full Board conducts annual formal written evaluations of the CEO.

• The Audit Committee reviews the 10-K with the independent auditors and management. The Audit Committee reviews with the independent auditors and management the 10-Q’s and earnings pronouncements prior to release.

• The Audit Committee regularly meets in executive session with the independent auditors, management and internal audit.

• The Audit Committee currently has four members who meet the SEC definition of “financial expert.”

• The Audit Committee engages the independent auditors, and annually reviews their independence, work and their fees.

• The Audit Committee approves all permitted non-audit work of independent auditors.

• For 2010, independent auditors’ fees for audit work were $1,236,776; no information technology services were provided; and audit related fees were $91,000 which included work for, employee benefit plan audits, transfer and registrar audits and consents and comfort letters related to security offerings. Tax fees for consultation and compliance services were $25,000 in 2010.

• The Audit Committee regularly meets with the independent auditor regarding critical accounting policies and practices.

COMPANY PROCESSES

• SJI has had a well established internal control environment supported by well documented practices and procedures. The Company has met the stringent requirements of Section 404 of the Sarbanes-Oxley Act whereby management certifies that at December 31, 2008 the internal controls over financial reporting are effective. The external auditors have affirmatively attested to management’s certification.

• SJI has an Accounting Disclosure Committee that meets monthly to review financial performance, accounting policies and practices and disclosures issues. The Committee comprises the CFO, executive and senior officers and representatives from legal, accounting, treasury, financial planning and reporting.