Theranos Cleans House, Gets Rid of Some High-Profile Board Members
December 2, 2016
(Last Updated: December 2, 2016 @ 8:26am PT)
By Alex Keown, BioSpace.com Breaking News Staff
PALO ALTO, Calif. – Theranos is cleaning house once again, but this time the company is making changes to its leadership.
In January, Theranos will disband its board of counselors as part of an ongoing evolution and consolidation of the embattled company’s “corporate advisory framework,” Theranos said. The Theranos Board of Counselors, initiated last year, largely consisted of members with strong political and government ties, including former U.S. Secretaries of State Henry Kissinger and George Schultz and former U.S. Sen. Sam Nunn.
Theranos created the board of counselors last year after it was roundly criticized for having a board made up of individuals with political backgrounds, but not scientific ones. The counselors’ role was to provide advice to the five members of the company board of directors, which was called the board of governors.
Theranos founder Elizabeth Holmes did not provide many details as to why the board of counselors is being disbanded, only saying in a statement she was grateful for their counsel and ongoing support. Schultz’ involvement with Theranos was recently highlighted when it came to light his grandson, Thomas Schultz, was publicly identified as the whistleblower who alerted media to concerns over Theranos’ blood-testing technology.
One politically well-connected name will remain on the company Board of Directors, Gen. James “Mad Dog” Mattis, who on Thursday was nominated to be U.S. Secretary of Defense by President-elect Donald Trump. Theranos is referring all inquiries about Mattis and his relationship to the general, Kendall Houston, a PR rep said to BioSpace in an email.
One change to Theranos’ board of directors is the departure of director Riley Bechte, who is leaving due to health issues, the company said. In his place, Theranos appointed Silicon Valley executive Daniel Warmenhoven, former CEO and executive chairman of NetApp, who will take an immediate position on the board.
Another Theranos board member who recently created a stir is attorney David Boies, who had also been providing legal assistance to the embattled company. Last month Boies, who has been a fierce advocate for the company, parted ways after disagreeing about strategies to handle ongoing government investigations. While Boies has ended his legal work for Theranos, there has been no indication he has abdicated his board spot.
Boies’ departure came at a time the company faces multiple lawsuits, including a $140 million lawsuit filed by former partner Walgreens and a lawsuit filed by a Bay Area hedge fund that alleged the biotech company duped investors about the efficacy of its products in order to attract investments of nearly $100 million. Theranos is also the subject of a criminal investigation by the U.S. Department of Justice with investigations centering on whether or not Theranos and its executives misled investors as to the efficacy of its blood-testing products.
In addition to Mattis, Warmenhoven and Boies, other board of directors members include Holmes; William Foege, a former director of the Centers for Disease Control and Prevention; Fabrizio Bonanni, a former Amgen executive; and Richard Kovacevich, a former CEO of Wells Fargo.