Theranos—Theranos maintained dysfunctional corporate governance with no independent oversight or regulatory compliance
Theranos exhibited comprehensive corporate governance failures. Holmes maintained complete control of the board through super-majority voting shares and did not tolerate dissent. The board had no system to monitor regulatory compliance. The laboratory operated for months without a qualified director, violating licensure requirements; when one was appointed, it was a dermatologist unqualified to run a clinical lab who served as an absent figurehead. Unlicensed personnel were allowed to conduct quality control procedures and process patient samples. The company concealed shortcomings through elaborate deception including locking laboratory doors during regulatory inspections and selectively reporting results to evade oversight from CMS.
Scoring Impact
| Topic | Direction | Relevance | Contribution |
|---|---|---|---|
| Corporate Governance | -against | primary | -1.00 |
| Corporate Transparency | -against | secondary | -0.50 |
| Overall incident score = | -0.643 | ||
Score = avg(topic contributions) × significance (high ×1.5) × confidence (0.57)
Evidence (1 signal)
Academic and legal analysis documented comprehensive corporate governance failures at Theranos
Multiple academic analyses documented Theranos's governance failures including Holmes's complete board control through super-majority shares, absence of regulatory compliance monitoring, operating without a qualified lab director for months, allowing unlicensed personnel to process patient samples, and elaborate deception during regulatory inspections including locking doors to hide equipment.