When news of the Theranos affair first broke out towards the end of 2015, I confess I had not paid much attention to the case. Subsequently, a couple of books came out, and I never read them. Early this month, after Elizabeth Holmes, the young still in late-30s founder and former CEO of the now-defunct Theranos was convicted for four charges of wire fraud, I started digging up old material. This included several articles in WSJ, FT, Forbes, Fortune, and elsewhere, and two books. One of these, by John Carreyrou (Bad Blood: Secrets and Lies in a Silicon Valley Startup), was made into a movie by Adam McKay starring Jennifer Lawrence as Holmes. The book also won the FT-McKinsey Business Book of the Year Award in 2018.
Though a lot has been written on Theranos, I did not find much on the corporate governance lessons from the case. This would have been too embarrassing for those who enjoyed an iconic status in American public life. These included George Shultz, who ended the cold war, Henry Kissinger of ping pong diplomacy fame, and General James “Mad Dog” Mattis, among other statesmen, and gentlemen from the US armed forces.
In the post below, I draw a few lessons for good corporate governance from the Theranos Affair.
Brilliant article! Thanks