Bleeding out: Theranos oozes with corporate governance lessons
Richard Morris was quoted in Compliance Week regarding the corporate governance lessons from the ongoing federal investigations of healthcare technology company Theranos. Morris discussed a common issue for all companies: finding the right balance of industry expertise on its board of directors. He explained the benefits of having subject-matter experts who “have more knowledge” and “can ask better questions,” but also emphasized that all directors “must work together to have meaningful conversations and to address and complement each other’s core competencies.” As to the current compliance issues that have been raised with respect to Theranos’ offerings, Morris noted that even if the Company’s offering documentation had material misstatements, it will not necessarily mean that the directors had breached their duty of care. “Directors are not guarantors,” Morris said.