Why the Theranos Board Failed to Stop Elizabeth Holmes

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In October 2015, Fortune described the Theranos board of directors this way: three former cabinet secretaries, two former senators and retired military leaders, a board like no other. Henry Kissinger, George Shultz, William Perry and James Mattis all sat on it. The company was valued at $9 billion. Three years later it no longer existed, and its founder was headed to prison. This is not another retelling of the Elizabeth Holmes story. It is about why the most decorated board in Silicon Valley stopped nothing.

A board for everything except blood testing

Theranos promised blood tests from a few drops taken from a finger. The board had twelve members, and apart from Holmes, who was both CEO and chair, they were all men. Fortune counted six directors with no experience in either medicine or technology, and their average age was 80. Only one, former senator and surgeon Bill Frist, held a current medical license. Nobody was the CEO of another operating company, and nobody had formal experience in accounting, auditing or law.

Then there was the voting structure. According to the Securities and Exchange Commission, Holmes held shares that gave her near-total control of shareholder votes. The board could advise her and could open doors in Washington, but it could not remove her.

What happened

On October 15, 2015, the Wall Street Journal published a story by John Carreyrou. According to a former senior employee of the company cited by the paper, at the end of 2014 Theranos was running only 15 of the more than 240 tests it offered on its own device. The company responded that the article was factually and scientifically wrong.

After that, the people who stepped in one by one all sat outside the board:

• June 2016. Pharmacy chain Walgreens ends its partnership, citing voided test results.
• July 2016. The federal regulator CMS, which oversees Medicare and Medicaid, revokes the certificate of the Newark lab and bans Holmes from running labs for at least two years.
• November 2016. Theranos shrinks the board from twelve members to five. Kissinger and Shultz move to the advisory board.
• March 14, 2018. The SEC charges Theranos, Holmes and former president Ramesh “Sunny” Balwani with “massive fraud”: the company raised more than $700 million from investors. According to the SEC, it projected more than $100 million in revenue for 2014 and actually had about $100,000. Holmes settles without admitting guilt: a $500,000 penalty, a ten-year ban on serving as an officer or director of a public company, and surrender of her voting control.
• June 2018. Holmes and Balwani are indicted.
• September 2018. Theranos announces it is dissolving the company.

A journalist, a regulator, a pharmacy chain and a prosecutor stopped this company. The board is nowhere in that line.

Elizabeth Holmes’s sentence

On January 3, 2022, a jury in San Jose found Holmes guilty on four counts of defrauding investors. She was acquitted on four counts involving patients, and the jury could not reach a verdict on three others. On November 18, 2022, Judge Edward Davila sentenced her to 135 months in prison, or 11 years and 3 months. Prosecutors had asked for 15 years. Davila said the letters of support reminded him that failure is normal in the Valley, but that none of them mentioned failure through fraud.

In May 2023, the court ordered Holmes and Balwani to jointly pay restitution to investors: $452,047,268. The largest single amount, $125 million, is owed to Rupert Murdoch. On May 30, 2023, Holmes reported to a federal prison camp in Bryan, Texas. Balwani, tried separately, was found guilty on all twelve counts and sentenced to nearly 13 years. According to Fortune, Holmes filed a request in 2025 to have her sentence shortened, and as of January 2026 it was still pending.

Theranos valuation before and after

Theranos never traded on a stock exchange, so there is no share price to show a day of panic. What you do have is a ratio: of a company valued at $9 billion, about $5 million was left to distribute.

What Theranos teaches about Nvidia

This comparison needs a caveat up front. Holmes has a final conviction for fraud. Nobody has brought charges against Jensen Huang, and Nvidia is a company that sells a real product and posts record results. So the lesson from Theranos is not about what the CEO did. It is about how the board was built.

The Theranos board was a collection of big names with no expertise in the company’s field and no power over the founder. Nvidia’s board does have power, because its shares are equal and its bylaws allow the CEO to be removed by a simple majority. According to Semafor, though, it has gaps of its own: an average director tenure of almost 15 years, nobody with experience as CEO of a large public company, and nobody with national security experience, which is exactly the area where the scandal broke out. Theranos shows that a board chosen for prestige fails when the problem lies outside its competence. In November 2026, Nvidia did what Theranos never did: for the first time in its history it elected a board chair, separating that role from the CEO. I chronicle those days in the report Fifteen days that changed Nvidia.

I write more about the story of Holmes and the company on the Elizabeth Holmes and Theranos pages.

Frequently asked questions

Who was on the Theranos board?

According to Fortune, in 2015 the board included Henry Kissinger, George Shultz, William Perry, Sam Nunn, Bill Frist, Admiral Gary Roughead, General James Mattis and former Wells Fargo CEO Dick Kovacevich, among others. Elizabeth Holmes herself was the chair.

How many years was Elizabeth Holmes sentenced to?

On November 18, 2022, a court sentenced her to 135 months in prison, or 11 years and 3 months, for defrauding investors. She reported to prison on May 30, 2023.

How much was Theranos worth?

At its peak, about $9 billion. The company raised more than $700 million from investors and was dissolved in September 2018.

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