Eight years and three days ago, Elizabeth Holmes was crowned “America’s youngest and richest self-made woman” by Forbes financial magazine. Holmes was 31 years old and was the founder, president and CEO of Theranos, a company that was about to revolutionize Medicine thanks to a prodigious technology that allowed analysis with a sample of just a drop of blood. The company was a classic example of a ‘unicorn’, that is, a start-up company that is not publicly traded but whose value is estimated at more than a billion dollars. In fact, Theranos (a combination of the English words ‘therapy’ and ‘diagnosis’) was valued at 9,000 million dollars (8,400 million euros). Forbes estimated Holmes’s fortune at about 4.5 billion dollars, or 2.2 billion euros.
As of today, Tuesday, Holmes is in jail, as a result of a sentence of 11 years and 3 months for fraud. Because that’s what Theranos was: a fraud. The company never developed anything like the technology it claimed to have. It was all a lie. And the lie could have continued much longer had it not been exposed by journalist John Carreyrou of The Wall Street Journal. Rupert Murdoch, the billionaire owner of the newspaper and Donald Trump’s main supporter in the US media scene, gave the newspaper the green light to investigate Theranos, despite the fact that he was one of the investors in the company.
The rest was Holmes’ fall from the corporate Olympus to hell. Though she grabbed at every nail-burning or not-she found. Her first line of defense was what the 21st century standards recommend: accusing Carreyrou and the Journal of sexism. But there was no sexism. Just fraud. However, the businesswoman has used all the weapons at her disposal, including a surreal defense of the New York Times that dedicated the cover of her Sunday magazine to her just two weeks ago, or blaming her then partner, Sunny Balwani, who was the company’s Director of Operations. This is how she has managed to avoid jail for eight years.
Theranos’s story offers some clues about the failures of corporate governance in the 21st century. Holmes created a kind of “public figure” in the image and likeness of the late Apple founder, Steve Jobs, which even included the turtleneck sweaters that he transformed almost into a kind of uniform when he appeared in public. Theranos’ board of directors was filled with elderly men, the vast majority with little to no experience in the worlds of business, innovation, biomedicine, or even the private sector: former Secretary of State and former National Security Adviser, Henry Kissinger; former Marine general and future Secretary of Defense Jim Mattis; former Admiral Gary Roughead; former Secretary of Defense William Perry; and former Sens. Bill Frist and Sam Nunn.
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