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"The Rise and Fall of Theranos: A Corporate Governance Cautionary Tale"

Updated: Jun 5, 2023

"The Theranos controversy, explained", this article delves into the rise and fall of Theranos, a medical testing startup founded by Elizabeth Holmes, and its connection to corporate governance.

Despite raising over $700 million and achieving a $9 billion valuation, a journalist exposed the company as a fraud in 2015, leading to Holmes being indicted on multiple counts of fraud and conspiracy.

Read on to learn about the corporate governance issues that allowed Theranos to deceive investors and the healthcare industry and the consequences that followed.

📰 Summary:

The article discusses the rise and fall of Elizabeth Holmes, the founder of Theranos, a blood-testing startup that claimed to revolutionise the healthcare industry.

However, Theranos turned out to be a fraud, and Holmes was charged with multiple counts of fraud and conspiracy.

🔎 Facts:

🔬 Elizabeth Holmes founded Theranos in 2003 at 19 and claimed that her company could run dozens of medical tests using just a few drops of blood.

💰 Theranos raised over $700 million from investors, with a valuation of $9 billion at its peak.

🚨 In 2015, Wall Street Journal journalist John Carreyrou published articles exposing Theranos' fraudulent practices and inaccurate test results.

🧪 The company used third-party machines for most of its blood tests, and its own technology only worked on a limited number of tests.

⚖️ In 2018, Holmes and her former partner Sunny Balwani were indicted on multiple counts of fraud and conspiracy.

🦺 Holmes settled with the SEC and agreed to pay a $500,000 fine, return 18.9 million shares of Theranos, and be banned from serving as an officer or director of a public company for 10 years.

📉 Theranos shut down in 2018, and its assets were liquidated to pay off creditors.

🔑 Conclusions:

Due diligence: The Board of Directors must conduct thorough due diligence on the company's operations and the CEO's claims before making decisions that could affect the company's reputation and finances.

In the case of Theranos, the Board relied heavily on Elizabeth Holmes' assurances and did not do enough to verify the technology and the company's financials.

Oversight: The Board of Directors must exercise proper oversight of the company's management and ensure that the CEO and other executives act in the company's and its stakeholders' best interests.

In the case of Theranos, the Board did not challenge Holmes enough on the accuracy of the company's technology and financials.

Transparency: The Board of Directors must ensure that the company is transparent about its operations and finances to its stakeholders, including investors and the public.

In the case of Theranos, the company was not transparent enough about its technology, and the Board did not do enough to address concerns raised by investors and the media.

Overall, the Board of Directors must act as a check and balance on the CEO and management to ensure that the company operates ethically and responsibly.

标题为"揭秘 Theranos 争议"这篇文章,从公司治理角度看 Elizabeth Holmes 的崛起与垮台。

这篇文章深入探讨了由 Elizabeth Holmes 创立的医学检测初创公司 Theranos 的兴衰和其与公司治理的关系。

尽管 Theranos 筹集了超过7亿美元,并在其巅峰时达到90亿美元的估值,但一位记者在2015年揭露了该公司的欺诈行为,导致Holmes被控多项欺诈和阴谋罪名。

建议阅读本文以了解导致 Theranos 欺骗投资者和医疗行业的公司治理问题及其带来的后果。

📰 摘要:

本文探讨了 Theranos 的崛起和衰落,该公司是由 Elizabeth Holmes 创立的血液测试初创公司,声称要革命医疗行业。

然而,Theranos 最终被证实是一种欺诈行为,Holmes 被控多项欺诈和阴谋罪名。

🔎 事实:

🔬 Elizabeth Holmes 在19岁时创立了 Theranos,并声称该公司可以使用几滴血运行数十种医学测试。

💰 Theranos 从投资者筹集了超过7亿美元,并在其巅峰时达到90亿美元的估值。

🚨 2015年,华尔街日报记者 John Carreyrou 发表文章揭露了 Theranos 的欺诈行为和不准确的测试结果。

🧪 该公司大多数血液测试使用第三方设备,其自有技术仅适用于有限数量的测试。

⚖️ 2018年,Holmes 和她的前任搭档 Sunny Balwani 被控多项欺诈和阴谋罪名。

🦺 Holmes 与美国证券交易委员会达成和解,同意支付50万美元罚款,归还1890万股Theranos股票,并禁止担任公共公司的高管或董事长长达10年。

📉  Theranos 于2018年关闭,其资产被清算以偿还债权人。

🔑 结论:


在 Theranos 的情况下,董事会过于依赖 Elizabeth Holmes 的保证,没有足够地验证技术和公司的财务状况。


在 Theranos 的情况下,董事会没有足够地挑战 Holmes 有关公司技术和财务准确性的言论。


在 Theranos 的情况下,公司没有足够透明地展示其技术,董事会也没有足够应对投资者和媒体提出的疑虑。



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