Google's Verily Stumbles Amid CEO's Questionable Business Approach and Ethics Allegations

Google's Verily Stumbles Amid CEO's Questionable Business Approach and Ethics Allegations
April 11, 2016
By Mark Terry, Breaking News Staff

One of the problems with running a public company in secret is it raises a lot of questions about what you’re doing and how you’re doing it. Verily, formerly Google Life Sciences, is coming under fire for how its chief executive officer, Andrew Conrad, approaches business, including some raised eyebrows over a research contract.

Verily tends to operate in quasi-secrecy, providing few details about its activities, and even less about some of its inside business structure. In December, the company announced seven medical partnerships, two research projects, and one acquisition. The company’s broad focus appears to be an attempt to merge big data and healthcare, while also developing various biological data monitors, such as a contact lens that can monitor a diabetic’s blood glucose level.

On the other hand, any employee speaking with a journalist without permission can be fired. And Verily is set up as a limited liability company, and as such isn’t legally required to release the names or duties of board members, which it hasn’t done. Often companies do reveal that information as a way of demonstrating the depth of their expertise and support.

Late in March, there were numerous stories about the company’s internal turmoil, mostly related to Conrad’s management style. Since 2014, a number of top Verily staffers have either left the company completely or returned to the mother ship, Google . One of those included Diane Tang, a “Google fellow,” a rare and coveted position of the company’s top technical roles, returned to Google. As did Kobust Jooste, one of Verily’s first employees, Michael Pearson, a top manager, and Karl Townsend, a leading engineer.

Apparently those stories were of enough concern inside Alphabet, Verily, and Google, that Sergey Brin, cofounder of Google, internally broadcast a town hall-style webcast that addressed them, noting that the news coverage projected a “bleak picture of management and products.”

Apparently in response to some of the allegations aimed at Conrad, he gave STAT an exclusive interview, where he noted that “Business is pretty dang good for us. That doesn’t mean that there’s not some people mad. But overall, the morale here is high.”

Conrad admitted that he was one of the company’s board members, but refused to name others, saying, “Let the lawyers do that. We’ll get you an official statement.” STAT did receive a statement, but no names of board members were listed.

More troubling than irritating top staff are accusations that Conrad steered a contract to California Health & Longevity Institute, a holistic wellness clinic and spa in Westlake Village, Calif., in which Conrad owns a majority stake. Apparently there was no competitive bidding. Conrad indicated the deal was inked before Alphabet spun Verily out of Google X. However, the clinic has no documented history of being involved in this kind of work.

In what is likely one of the worst responses possible to questions about why Conrad promoted the clinic, he told STAT, “Because I think it’s cool. Because it’s super efficient to have everything in one spot.”

As Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware told STAT, it “raises all kinds of red flags.”

Typically the board would approve deals like that. As mentioned above, that information is not public, although all of the board members apparently are employees of Alphabet or Verily.

Another possible ethical problem that has cropped up is Verily’s research project, Baseline. The company has plans to recruit 10,000 volunteers over the next five years and collect huge amounts of clinical medical data. But, as STAT reported, “It’s unclear whether Verily has informed volunteers of its plans to profit on their health data; the company declined to provide a copy of the consent agreement for volunteers tested at Conrad’s clinic.”

It also pointed out that the data could be worth hundreds of millions of dollars.

What isn’t completely clear is whether there are actual problems, or just that Verily’s culture of secrecy and Conrad’s shoot-from-the-lip style are making it appear that the company is running fast-and-loose with ethics. The contract with Conrad’s clinic seems more problematic, although it was for a feasibility study that evaluated the first 200 of the 10,000 volunteers for the Baseline project. Most of the remaining volunteers will be tested by Duke and Stanford universities. Nonetheless, more transparency could possibly quell the rumors and bad PR.

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