Originally published in the December 2002 Issue of Link & Learn.

© BusinessWoman Magazine, Fall 2002

Over the course of the past year, Sherron Watkins has become a household name in the United States. Watkins had worked as an accountant before becoming a vice president of corporate development at Enron Corp. In the course of her work at Enron, she became aware of some highly questionable accounting practices, and tried to warn chairman Ken Lay of potential disaster. Her now-famous memo of August 15, 2001, says in part, "I am incredibly nervous that we will implode in a wave of accounting scandals."

She followed up this memo with personal meetings with Cindy Olson, Enron's executive vice president for human resources, and chairman Ken Lay himself. At these meetings, Watkins tried hard to convince the company's top management of the seriousness of Enron's position.

Ken Lay ignored Watkins' warnings, and her memo proved eerily prescient. A few months later, Enron did indeed implode. Once the seventh largest company in the United States, it became the largest bankruptcy in U.S. history.

Although Watkins' warnings were not attended to, she had made every effort to get top executives to address Enron's deceptive business practices. As she says today, "I wasn't going to be able to live with myself, just slink off and find another job. I felt I had to say something and I had to do something."

During congressional hearings into the Enron scandal, Representative James Greenwood (R-PA) commended Watkins for acting "not as a whistle-blower in the conventional sense," but as "a loyal company employee who sought valiantly" to make the company's management address the problem. Rep. John Dingell (R-MI) praised Watkins' integrity, calling her "an extraordinary, courageous woman, who has been a bright spot in an otherwise sorry and outrageous saga."

In July, Business and Professional Women (BPW)/USA presented Mrs. Watkins with a Women Mean Business Award, in recognition of her determined efforts to effect positive change, before it was too late for Enron. But Sherron Watkins is more than a BPW award winner and member; she is also a workingwoman whose life and career exemplify many of the goals and objectives of BPW/USA as a whole. Following is a summary of remarks Sherron shared at the BPW/USA National Conference (New Orleans, 2002) and in a BPW/USA interview, as well as information she has shared with Congress in the past.

Personal Background

Sherron Watkins was born in Tomball, Texas, some 30 miles from Houston. The daughter of an educator and a lawyer, she went to parochial school in Tomball until eighth grade, then public high school. After graduation she went to the University of Texas at Austin, where she earned a Master's Degree in accounting in 1982. In 1983, she became a certified public accountant.

Hired by Arthur Andersen in 1982 as an auditor, Watkins spent eight years with the giant accounting firm, working in both their Houston and New York offices. She left Andersen to work for MG Trade Finance, a New York-based commodity lending group. In 1993, Watkins was hired by Andrew Fastow to manage Enron's newly formed partnership with the California Public Employees Retirement System.

After several years working on the East Coast, Sherron was now back in Texas, near her home and family. And in 1997, she formed a family of her own when she married Richard Watkins, another energy executive whom she met in church. Sherron and Richard have one daughter, Marion.

The Importance of Mentors

While working at Arthur Andersen, Sherron was fortunate enough to find a mentor who was able to give the young accountant advice about the road to realizing her ambitions. He urged her to make her presence felt, and to make sure that her superiors knew about her employment goals. Sherron recalls, "I was a well-regarded staff person, and it usually took five years to become a manager, but some people made it in four years. And this person said to me, 'You have to let it be known that you want to be a manager in four years, that you deserve it.'" Sherron believes that many women are like her, "We don't toot our own horns enough."

Even after she moved on from Arthur Andersen, Watkins still turned to her mentor, sometimes for advice, sometimes as a dependable sounding board. In fact, he was one of the people she turned to in August 2001, as she was trying to chart a course of action at Enron.

Quality Childcare

As a parent, Watkins is acutely aware of the importance of quality childcare. She notes that some parents "have very few choices; their daycare is limited. Sometimes they don't feel very good about coming in to work, because they aren't comfortable with the daycare choices they have been left with." Many employers, she notes, are unaware of the child care dilemmas their employees face; the executives who have the power to change things can afford to pay for top-quality childcare. However, she continues, quality child care benefits the employer too "because it means the employee is free to focus all their attention on work, they are comfortable that their child is in good hands." When Enron finally set up a company-sponsored daycare, Watkins explains, "it was fantastic for the lower end of the pay scale because it was a subsidized daycare across the street. They could pop over and see their children at lunch."

Work-Life Balance

Watkins' daughter Marion is still in pre-school, and she has an in-home child care provider. Because of this, Sherron feels she has yet to experience the worst challenges of balancing work and home; "I think as your children get older and you don't want to miss school plays or soccer games or baseball games, it's a much larger struggle." Still, she feels that the latest generation of workingwomen is much more focused on keeping that balance from the start. "I think women were struggling to be on an equal footing with men. They wanted to make sure that there was never any kind of accusation that they couldn't give 110 percent because they were racing home to manage a family as well. But from what I understand from both men and women entering the workforce today, they are saying 'No, I'm going to have a healthy balance, and if you want me as an employee, you've got to accept that I will occasionally prioritize some family issues above work issues.' That is healthy. I would like to see that happen in the United States. I think that women have moved far enough within the workforce that we could start to do that."

Equity for Women

As Sherron notes, women have made great gains in the workplace. And yet, she says, some apparent gains are only chimeras. In many areas of the workforce, people in entry-level positions are treated relatively evenly: "It is a meritocracy.... people advance based on their contributions." However, at higher levels, this even treatment often fades. "There is still definitely a glass ceiling," says Watkins. "I saw that at Enron, where I was hired as a director. I asked one supervisor, 'OK, what's it going to take for me to make vice president?' He looked at me oddly and replied, 'You have that as a goal?' Well, of course I did." And, indeed, Watkins went on to achieve that goal. But she also notes that some industries have two tiers in the ranks of upper executives, and that one of these tiers-filled largely by women-often has less real power than the other. In some fields, such as law or accounting, "a partner is a partner." However, in other business areas, some promotions are little more than window dressing for the Equal Employment Opportunity Commission. "They can say, 'See, 40 percent of our vice presidents are women and 60 percent are men.' But the reporting doesn't show that the women are vice presidents in areas like commercial support and technical support; they are not really part of the management of the company. ...It's still a problem. You really get marginalized as you rise."

What the Future Holds

As a result of the Enron scandal, Sherron Watkins now faces even greater challenges than most women in the workplace. While she is still employed at Enron, she recognizes that the company is not likely to survive. However, given her current notoriety, "people become a little bit afraid of you. I now supposedly have access to the press. A corporate job might be difficult for me to find." Also, she recognizes that she does not yet have full control of her time, and might not be able to dedicate herself full-time to a new job; "There are ongoing investigations, and I routinely get called in to answer questions." But Sherron Watkins isn't the type who shrinks from a challenge. Instead, she's seeing it as a fresh opportunity. Enron, she notes, isn't the only company where shady financial practices have come to light. As a result, corporate boards are taking a new approach to financial information. Enron's board members-like many other corporate boards-had directors and officers liability insurance protection to protect the board in case the company and its board are sued. But with Enron bankrupt and facing numerous lawsuits, the insurance coverage will likely not be sufficient and Enron's indemnification won't be worth much, leaving the board members facing some pretty serious personal liabilities. Across the country, board members are realizing that they may suffer personal financial harm for the decisions they make or they fail to make, and they are getting directly involved in checking the company's books, among other things. With her accounting background and her proven ability to notice warning signs, Watkins is looking at this area as a possible career direction: training board members to recognize red flags. "Because," she notes, "they were there for Enron's board to recognize, but they were cloaked in a lot of very professional non-alarming language. ...You've got to recognize what the words actually mean."

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