Introduction

Case Study – The Silicon Valley Start-Up, Theranos

Founded by a 19-year-old Standford drop-out in 2003, the story of Theranos, a Med-Tech Start-up in Silicon Valley is one to consider. The company touted a breakthrough in health technology through the use of small automated devices. In 2014, the company became a unicorn, valued at about $10 billion. However, in the end, it was discovered that the technology was not what the founder Elizabeth Holmes claimed and she was charged with fraud in 2018. One of the major issues considered is the unusual roster of names for the healthcare startup, with board members who have more experience in politics and government than in healthcare.

 Corporate Governance, Sustainability and the Role of the Board

The concept of corporate governance is one that ensures a company follows an established system of rules, practices, and processes. The end goal is achieving the company’s set objectives. When a Company implements good governance principles, it wins in credibility, provides safety for investors’ money, and generally satisfies the interest of stakeholders.

The primary responsibility for ensuring good corporate governance in companies lies with the Board. Thus, the composition of a company’s Board should be one that can guide a company to become effective and also sustainable. The Board of Theranos was largely criticised for its composition, and lack in diversity of thought, backgrounds, skills, experiences and expertise needed to drive the Company and perform its oversight function effectively. The Board was composed mainly of politicians and military heads.