Joseph Motes of Bread Financial: Five Things Corporate Boards Can Get Wrong, And How To Fix Them

In a rapidly evolving business landscape, corporate boards play a pivotal role in guiding organizations towards success. Yet, even the most seasoned boards sometimes falter, overlooking critical elements or clinging to outdated practices. From misaligned priorities and lack of diversity to inadequate communication, the repercussions of these missteps can be profound. But there’s always room for improvement. How can we identify these gaps and, more importantly, bridge them?In this interview series, we are talking to seasoned board members, corporate governance experts, business strategists, and any authoritative figure on the subject to uncover the most common pitfalls corporate boards face and derive actionable insights on rectifying them. As a part of this series, we had the pleasure of interviewing Joe Motes.

Joe Motes joined Bread Financial in 2015, after nearly 20 years with leading law firm Akin Gump Strauss Hauer & Feld LLP, where he was the partner and lead relationship manager for Bread Financial. At Akin Gump, Joe’s practice focused on mergers and acquisitions, capital markets transactions, and public company matters, including corporate governance and general corporate advice. He served as lead outside counsel on substantially all of Bread Financial’s material acquisitions, dispositions, and debt financings, including the company’s $2.3 billion acquisition of Conversant.

Joe was promoted to Chief Administrative Officer in June of 2019, where he oversees a number of the Company’s internal corporate functions and organizations in addition to his continuing responsibilities as general counsel and secretary. Joe holds a bachelor’s degree in geology from Trinity University and a JD from Southern Methodist University Dedman School of Law, where he served as Editor-in-Chief of the SMU Law Review and graduated magna cum laude. He has served on various service-oriented nonprofit boards, donates pro bono service hours each year, and is an advocate for individuals with cognitive disabilities. As general counsel, Joe works closely with our board and executive leadership to develop and implement corporate governance “best practices,” with a focus on ESG and sustainability matters. He is a strong advocate for workplace diversity and an ethics-driven corporate culture, and the rights of individuals with cognitive disabilities. Away from the office, Joe enjoys spending time with his wife and their three children and is an avid live music fan.

Thank you so much for joining us in this interview series! Before we dig in, our readers would like to get to know you a bit more. Can you tell us a bit about your “backstory”? What led you to this particular career path?

My career path wasn’t exactly linear or traditional. In fact, my interest in science and passion for live music took me in a few different directions ultimately leading me to where I am today. I studied Geology in both undergrad and grad school. I was and still am a devoted Grateful Dead fan, and during grad school I had a side hustle making tie-dye t-shirts. Shockingly, the tie-dye side hustle kind of took off and I ended up dropping out of grad school to devote more time to the business. Probably not my best decision ever, and eventually I realized I needed a more stable career path for the long term. My dad encouraged me to go back to school, which is when I enrolled as a law student at Southern Methodist University Dedman School of Law. After graduating and passing the bar exam, I went to work at Akin Gump Strauss Hauer & Feld LLP for nearly 20 years supporting a variety of clients. It was during my time spent there where I was introduced to the company I work for today — Bread Financial.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?

In the legal field, mistakes tend not to be viewed as funny. However, one amusing aspect of my background that I still laugh about today is how for many years I found myself not conforming to the conventional image of a big firm lawyer, which gave me a persistent “fish out of water” feeling. My firm’s culture was very buttoned-up and traditional — nice suits and tidy haircuts. I’m a “let’s go to a concert’ jeans and t-shirt guy who had to have someone help me tie my tie for my first law firm interview. The culture clash gave me some serious imposter syndrome for the first few years working in that environment. I always knew I fit in just fine, but subconsciously felt like I might not make it past the security desk every morning. I got over it (but I can’t deny being happy that dress codes loosened up). My takeaway was that everyone has a background story and we all come from different paths, all of which are valid, to the roles we have today. There’s a true value of having people from diverse backgrounds come to one table to examine situations through different lenses. We should all celebrate where we come from — diversity creates value for companies.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

Having a good mentor really can help you get to where you want to be as a professional. I was fortunate to have found an incredible mentor at the law firm who showed me the ropes, supported and challenged me, and really fostered my success. He ultimately left the firm to become the first General Counsel at Bread Financial (then known as Alliance Data), one of the roles I serve in now. Alan Utay was also a great personal friend, and I was just one of so many people who learned and benefitted from his friendship and expertise. Alan passed away at an early age, and I’ll never forget him and all he did for me.

Leadership often entails making difficult decisions or hard choices between two apparently good paths. Can you share a story with us about a hard decision or choice you had to make as a leader?

Choosing between two apparently good paths is more of a luxury. Choosing between two apparently challenging paths, and figuring out which is less bad, is the more common situation. For hard choices I try to make sure I have the best information available and get input from trusted colleagues. I’m fortunate to work with a great leadership team, and you can be more confident “going with your gut” if your gut is well informed. Thinking about hard choices, I recall some delicate discussions I’ve had as an advisor to boards of directors. Some of the shareholder-driven principles of good corporate governance that are fundamental today (e.g., board diversity, board refreshment) weren’t really a thing ten or fifteen years ago. As those principles became best practice, many long-tenured directors weren’t receptive to these changes — it wasn’t the way they had done things in the past and they weren’t looking to fix things they didn’t believe were broken. But times change and public companies have to be responsible to shareholders, so I knew the right, if unpleasant, choice was to be persistent in advocating for change. With help from a few forward-thinking directors, these concepts — which were somewhat novel then but have since become table stakes — gained acceptance from even “old-school” directors. Diversity of thought and regular assessments of how board composition aligns with long-term company goals will propel a company forward and should be at the core of every board’s governance framework.

Most of our readers — in fact, most people — think they have a pretty good idea of what a corporate board does. But in just a few words can you explain what a board does that is different from the responsibilities of the other leaders?

The board’s fundamental role is to provide oversight of a company’s management and to look out for the best interests of shareholders. Strong boards both advise and challenge company leadership, bringing the directors’ collective experience and expertise to help management chart a successful course for the business while being mindful of and not taking undue risks. A common misconception is that the board runs the company, but that is management’s role. In my role I often serve as an advisor to both the board and company leadership.

What are the “myths” that you would like to dispel about the role of a board member? Can you explain what you mean?

I think boards are widely misperceived as being dour groups of people who enjoy beating up on and interrogating management. While the role does call for directors to ask tough questions and challenge management, it also calls for directors to share their expertise with and serve as a resource to management. I have yet to encounter the “bully” director I think people expect is the norm. Another misconception is that being a director is a “cush” job. It’s actually a difficult job that comes with significant responsibility and fiduciary duties. One other common misconception is that directors are experts, maybe even the experts, in the specific industry of the company on whose board they serve. While a particular director may well be an expert in the company’s line of business, a board usually includes directors who don’t have that background. Highly effective boards typically include directors from a range of industries and work experience to ensure an appropriate mix of expertise, skill sets and perspectives are brought to the table. As in business, diversity is a strength when it comes to board composition.

Do you think everyone is cut out to be a board member? In your opinion, which specific traits increase the likelihood that a person will be a successful board member and what type of person should avoid aspiring to be a board member? Can you explain what you mean?

Not everyone is cut out to be a board member. I think the balancing act for directors is being able to walk the line between oversight, which is the director’s role, and management of the company. A board member needs to be skilled at advising, questioning and challenging company leadership — while being mindful that running the company is management’s role. Additionally, successful board members are not only straightforward but also astute listeners who seek to understand management’s perspective.

How do you handle dissent or disagreement in board meetings, especially when you feel strongly about a particular decision or direction?

Debates and disagreements, among directors or between directors and management, are to be expected given the purpose of board meetings and the roles of those attending. The board itself is usually composed of people from a variety of backgrounds, areas of experience and types of expertise. Having assembled a governing body comprised of people selected precisely because of their diversity of perspectives is naturally going to result in people having differing views on some issues. Similarly, an important part of the board’s role is to challenge management, so disagreement is to be expected in that context as well. Ultimately most directors go into board meetings knowing their views and opinions aren’t going to solve every problem on its own. Everyone has a vote, and the board is responsible to govern themselves. While there can be disagreements or debates because of natural differing opinions, you can still discuss ideas and collaborate in a constructive and respectful way. It all comes back to being a strong listener and a well-informed decision maker.

What advice would you give to other business leaders and board members to help create a fantastic work culture? Can you share a story or an example?

Good culture is a hard thing to create. The best you can do is try to model the behaviors you hope to see and work to communicate a tone from the top. A few leadership traits that in my view may deserve particular focus, or that may have a more direct impact on the work environment, are active listening and consistent transparency. Leaders should try to be good listeners. Associate surveys regularly show that people who are otherwise happy in their roles don’t feel heard. The same can be true of boards when they do self-assessments. The results often expose that same complaint. None of us think we don’t listen to our colleagues and constituents, but clearly a lot of the people speaking to us have a different experience. Making the effort to actively listen — not thinking about the point we are waiting to make or multi-tasking on a keyboard or phone — builds real, engaged relationships, and those relationships can meaningfully change the way teams work together, at the company and even at the board level. Transparency is about what we say to people. When leaders are transparent, people sense and appreciate it; people perceive when someone is being authentic and when they aren’t. Like good listening, transparency earns trust, and trust builds teams. When people genuinely feel that a leader is straight with them and hears what they have to say, they feel like part of a cohesive team. That’s good culture.

Fantastic. Here is the primary question of our interview. What are your “Five Things Corporate Boards Get Wrong, And How To Fix Them”? (Please share a story or example for each.)

1 . Lack of transparency: Whether among directors or between the board and management, straight talk is fundamental. Telling hard truths or sharing bad news can be uncomfortable. Transparency, even when what is being conveyed is difficult to hear, is critical to building a trusting, constructive working relationship. Well-informed boards are empowered to make good decisions, and transparent management provides the board with that information.

2 . Stagnation: It’s human nature to resist change. When things are going well, it’s even more difficult to move away from the tried and true. But businesses operate in a dynamic environment where what works today me be done better and faster, or become entirely obsolete, somewhere down the way. Directors need to keep an eye on the company’s long-term plans, challenge management to ensure those plans are sound and achievable, and exercise good oversight to ensure those plans are timely and properly executed.

3 . Failure to diversify expertise: Boards should comprise experts from a variety of industries and backgrounds. Diversity of thought and expertise allows for more productive and intentional engagement to provide management with well-rounded guidance. As a company’s business changes board composition should evolve to align to the company’s needs.

4 . Oversight of risk: Successful businesses usually have a strong focus on identifying and mitigating risk. Whether through a formal risk committee or as part of another committee’s delegated powers, boards should prioritize examination and oversight of the company’s risk management framework and the operation of its risk organization.

5 . Lack of self-imposed good governance: Public company boards are of course answerable to shareholders and are also rated and judged by proxy advisors and governance advocacy groups. Boards should also be answerable to themselves, implementing modern good governance practices (e.g., board refreshment, DE&I commitments, climate awareness) because they are the right thing to do rather than in response to outside pressure to do so.

Boards are not just about the here and now; they’re also about steering the company’s future direction. How should a board ensure that short-term goals don’t overshadow the long-term vision of the company?

Ensuring that management is prioritizing long-term, sustainable success and creation of value for shareholders is one of the board’s most important roles. For public companies, the pressure for short-term, quarterly successes can be intense. To ensure that short-term goals aren’t achieved at the expense of long-term goals, it’s important for the board to be very familiar with management’s long-range plan, to challenge that plan when appropriate and to require that management regularly demonstrate its execution of that plan. In general, companies can’t be static and remain competitive. The best directors help management plan not only for today’s challenges but also for the economic, regulatory and competitive challenges the company will face in the future.

How have you used your success to make the world a better place?

I support a number of service-oriented nonprofit organizations, provided pro bono legal services and served on or advised their boards. I’m a lifelong advocate for minority rights, workplace diversity, ethics-driven corporate culture and, as the father of a child with Down Syndrome, the rights of individuals with cognitive disabilities.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good for the greatest number of people, what would that be? You never know what your idea can trigger.

I’m not sure it could be thought of as a “movement” but something I would advocate for anyone and everyone is pretty simple — try to be kind in everything you do. Everyone wants to be treated with respect, to be heard and recognized. It’s not hard to say “thanks” to people, or to let someone merge in front of you in traffic, but it’s also very easy not to do things like that. Being mindful in trying to make things a little less coarse can go a long way. Yes, I know I sound like an old hippy but there you go.

We are very blessed that some very prominent names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US with whom you would love to have a private breakfast or lunch with, and why? He or she might just see this if we tag them.

I’d love to have breakfast with CFPB Director Rohit Chopra if you think you can hook that up. That failing, I’m a big fan of evolutionary biologist Richard Dawkins.

Thank you for these fantastic insights. We greatly appreciate the time you spent on this.

About the Interviewer: Douglas E. Noll, JD, MA was born nearly blind, crippled with club feet, partially deaf, and left-handed. He overcame all of these obstacles to become a successful civil trial lawyer. In 2000, he abandoned his law practice to become a peacemaker. His calling is to serve humanity, and he executes his calling at many levels. He is an award-winning author, teacher, and trainer. He is a highly experienced mediator. Doug’s work carries him from international work to helping people resolve deep interpersonal and ideological conflicts. Doug teaches his innovative de-escalation skill that calms any angry person in 90 seconds or less. With Laurel Kaufer, Doug founded Prison of Peace in 2009. The Prison of Peace project trains life and long terms incarcerated people to be powerful peacemakers and mediators. He has been deeply moved by inmates who have learned and applied deep, empathic listening skills, leadership skills, and problem-solving skills to reduce violence in their prison communities. Their dedication to learning, improving, and serving their communities motivates him to expand the principles of Prison of Peace so that every human wanting to learn the skills of peace may do so. Doug’s awards include California Lawyer Magazine Lawyer of the Year, Best Lawyers in America Lawyer of the Year, Purpose Prize Fellow, International Academy of Mediators Syd Leezak Award of Excellence, National Academy of Distinguished Neutrals Neutral of the Year. His four books have won a number of awards and commendations. Doug’s podcast, Listen With Leaders, is now accepting guests. Click on this link to learn more and apply.