Milton Scott's appointments in corporate America have few parallels. As the first African American to become a partner in the audit practice at the international accounting firm of Arthur Andersen he influenced multi-million dollar deals and made important decisions that affected large segments of the telecommunications, technology and energy arenas at a time when the economy saw tremendous growth in those sectors. At Dynegy he was executive vice president and chief administrative officer responsible for several key divisions including Risk Management, Internal Audit, Supply Chain Management, and Human Resources, reporting to one of the most important players in the energy industry. As a managing partner of Complete Energy he uses his 25 years of accounting, finance and business experience to close deals on the purchase of multi-million dollar power plants.
Navigating deftly in the high-powered corporate waters of Houston, Texas, Scott's achievements have led him a long way from his childhood in Louisiana. Scott was born on November 21, 1956, in New Orleans and raised on a farm in St. Francisville, LA. He was one of eight children born to Bennett and Melnor Scott. He realized at an early age that he did not want to live on a farm for the rest of his life. "My father worked in a paper mill from 6:00 a.m. until 3:30 p.m. each day, changed his clothes, and worked on the farm until 10 at night," Scott said in an interview with Contemporary Black Biography (CBB ). "I learned an incredible work ethic from him and I started from the bottom. My father had a seventh grade education and spent a lot of time teaching us that education was the way out. He always made sure we had food on the table and he gave a lot of what he raised to others." Because of this Scott says, "I believe in giving a lot back to the community and I understand how success in life should allow you to help others." About his mother Scott says, "She created a strong home environment and made sure we attended church."
Never Gave Up Despite Misgivings
When he was a young child, Scott mentioned to his father that he might want to some day drive a construction truck. Clearly his father was disappointed. "I remember the look in my father's eye," Scott told CBB. Scott then developed an interest in law. He'd sometimes leave school and go to the local courthouse to watch the lawyers in action. In 1974 Scott graduated from St. Francisville High with plans to attend Southern University in Baton Rouge, earn a degree, and go on to law school.
Scott's plans changed when a congressman he had campaigned for suggested he complete the bachelor's degree and then get practical business experience before entering law school. In 1977 Scott received an accounting degree and landed a job at Arthur Andersen, the largest accounting firm in the country. He planned to work for two years, pass the CPA exam, and then tackle the law books.
At Andersen he was the only African American in his orientation class. Many of the new-hires there had attended prestigious schools and come from backgrounds very different from Scott's. "I remember not being very confident at the time; I began doubting myself and thought I had made a major mistake taking the job," Scott said. "But I remembered what my father taught me; nobody was going to make me quit." This difficult time in Scott's career taught him a valuable lesson about perseverance and raising his own kids. "As a result I instilled in my own children three important things: they belonged, they could compete, and they were always cared about," Scott told CBB.
Grew Telecom Division
Two years passed and Scott revised his plans about law school. "I was doing well at the firm," he said. "I was promoted to senior accountant and was preparing to become a CPA, but I did a cost-benefit analysis and determined that I hadn't put enough money away. If I stayed at Andersen for three more years I could become a manager and earn more." Scott was promoted to senior accountant in 1979. He became an audit manager in 1982, earned several other promotions through the years, and in 1990 he became the first African-American partner in the audit practice at Arthur Andersen.
One of Scott's many accomplishments at Andersen was the creation of the Technology and Communications division. Many other accounting firms had a large presence in this sector and were way ahead of Arthur Andersen in the region. Scott had responsibility for building the southwest region. "We opened an office in Austin, Texas, and grew the regional practice to a very large P&L and a staff of 150 in three years," Scott told CBB.
Scott never planned to leave Arthur Andersen. But some offers are difficult to refuse. As he chaired a dinner one evening, Chuck Watson, CEO of Dynegy, one of the fastest-growing energy companies in Houston, heard Scott speak and was impressed. He submitted Scott's name to a search firm he had hired to find an African American for the position of chief administrative officer at his company; Scott declined the offer. Watson then contacted Scott personally. Realizing it would be diplomatic to at least discuss the matter since Dynegy was a client of Arthur Andersen, Scott met with Watson. "What I didn't know at the time was Chuck Watson doesn't take 'no' for an answer, and I realized it was a great opportunity," Scott said. "Here was a chance to go in as an executive vice president at a Fortune 500 company reporting directly to the chairman and CEO. I ended up being the highest-ranking African American in corporate Houston. I didn't see any downside to it; there was a huge upside."
Gained Entrepreneurial Experience at Dynegy
Joining Dynegy in 1999, Scott headed several areas: risk management and credit, corporate planning, compliance and internal audit, insurance, human resources, global facilities management, corporate security, supply chain management, and was liaison to the board of directors. "It was a fast-paced, entrepreneurial company that Chuck Watson had grown from scratch to a Fortune 500," Scott said. "There were not a lot of processes and controls, and it was a very close-knit group that had been together for a long time. I was an outsider; but I love challenges." Scott also attributes his success to the fact that he was well connected in the community. He knew it was a high profile position that was well chronicled in the press. "I had an opportunity to put my stamp on it; so I went in with ambitious objectives," he told CBB. "One of the first things I did was to help restructure the board. We added three women and two African Americans. We had no women in senior management and ended up having more than anyone in Houston in a matter of three years. We helped transform the company in a very short period of time."
At a Glance...
Born Milton Scott on November 21, 1956, in New Orleans, LA; married Yava Williams, 1982; children: Kirsten, Kameron. Education: Southern University, BS, accounting, 1977.
Career: Arthur Andersen, LLP, Houston, TX, partner, 1977-99; Dynegy Inc., Houston, TX, chief administrative officer and executive vice president, 1999-2002; The StoneCap Group LP, Houston, TX, managing director, 2003; Complete Energy Partners, LLC, Houston, TX, managing director, 2004–.
Selected memberships: University of Texas at Austin McCombs School of Business, trustee; Greater Houston Community Foundation, board member; WH Energy Services, lead director; Museum of Fine Arts, Houston, board member; River Oaks Baptist School, trustee.
Addresses: Office— Complete Energy Holding, LLC, 1221 Lamar, Suite 1020, Houston, TX 77010.
Although he never made it to law school it all worked out well. He told CBB that in order to make the right career moves, "it's important for young people to surround themselves with mentors. They should try to get them early on. I believe you need three to be successful in corporate America: One inside the division you're working in, one outside the division who works for your company, and someone totally objective outside of the company." Scott highlighted other important qualities for success: "If you want to be influential you better know what you are doing and you must produce," he said. "Go beyond what is expected of you and you cannot have a chip on your shoulder. You can't whine, you can't assume anything, you must be willing to establish a rapport with others in the company who are rising; don't wait for them to come to you. Be aggressive. If you don't do these things you will be labeled early on; then it will be difficult to shake the label even if you change."
Scott left Dynegy in 2002 and became a managing director at The StoneCap Group LP. The company acquires power generation assets. In 2004 with three partners Scott formed Complete Energy Partners, LLC, a start-up investment boutique that also purchases power plants. Their work involves raising capital, arranging financing, and using the relationships the partners have built over the years to "open doors with sellers," he said. "Our first deal was a $330 million dollar transaction. If I had not been prepared to do this because of all of my previous work, no one would take us seriously. I'm taking on a lot more risk; but quite frankly I am not nervous. I am quite comfortable with what I can do."
Houston Business Journal, November 5, 1999, p. 5A.
Power, Finance, and Risk, September 20, 2004, p. 3.
Additional information for this profile was obtained through an interview with Milton Scott on January 5, 2005.
—Sharon Melson Fletcher
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