The infamous saga of Elizabeth A. Holmes has been well-documented in popular media. Between an HBO documentary, a Wall Street Journal exposé, a plethora of podcasts, and a star-studded Hulu series, all chronicling the rise and fall of her fraudulent biotech company Theranos, it seems just about everyone has an opinion of Holmes.
Theranos Inc. was a healthcare startup — valued at $10 billion at its zenith in 2013 and 2014 — once considered to be on the cusp of revolutionizing the blood-testing industry. Founded by Holmes, a Stanford dropout, in 2003, Theranos quickly garnered funding from an illustrious set of big-name investors, with Holmes touting her company’s technology as a way to run hundreds of medical tests with a single drop of blood. However, in 2015, the technology at the core of Theranos was ultimately exposed as a massive deception. Holmes was convicted of fraud in January of this year.
But before Theranos came crashing down, Holmes raised over $700 million from high-profile investors, drawing numerous distinguished personalities to her company’s corporate board. While conning a slew of A-list investors, Holmes was also courting a different kind of prestige: a seat on Harvard Medical School’s Board of Fellows.
The Harvard Medical School Board of Fellows is a non-fiduciary board created in 1990. Board members serve as external advisors to the leadership of the school and provide counsel on topics related to the strength, health, and well-being of the institution.
Before the fall of Theranos, many on the Board were excited at the possibility of having Holmes — a rising star in the biotech industry — join their ranks. What they didn’t anticipate was that her time at HMS would be so short-lived and riddled with controversy.
‘She Might Learn Something New’
In 2015, then-Dean of Harvard Medical School Jeffrey S. Flier received a call from a senior professor at Harvard Business School who hoped Holmes would deliver a keynote address at their upcoming healthcare symposium.
The professor wanted Flier to connect him with William H. Frist, a member of the HMS Board of Fellows who also happened to sit on the board of Theranos. “A keynote address to that group would have been quite an important role,” Flier says.
Soon, Flier would have other hopes for Holmes — courting her to join the HMS Board herself.
The Board is “designed to be a highly accomplished group of people with whom we have regular contact and are informed about what the school is doing, what the future activities are, what the challenges are,” Flier says.
Frist told Flier that Holmes had to pass on the opportunity due to a scheduling conflict, but that she would be happy to meet with Flier if she was ever in Boston or he found himself in Palo Alto, California, the site of Theranos headquarters.
Later that year, Holmes found herself on Harvard’s campus to receive an award, and her office reached out to set up a meeting with Flier. The pair had lunch in a private room at the Faculty Club, “with one of her guards posted outside,” according to Flier.
During their meal, Flier says Holmes touted several other high-profile board invitations she had rejected, but she expressed interest in becoming involved with HMS. She delivered her Theranos pitch to Flier, during which he says Holmes claimed that “everyone is in mortal fear of a blood test.” Flier challenged her, arguing that too much self-ordered blood testing could lead to “false positives” that could elicit further testing with “harmful and disruptive” results.
“She looked at me like no one had ever said that before,” he says.
Flier thought Holmes’s reaction to his query was “slightly odd,” but he ultimately pushed aside his doubts because the role was strictly advisory and did not require any medical expertise or involve fiduciary responsibility, he says.
“Look, we’re not asking her to run the world of testing. We’re asking her to be on our board while this all plays out. And she might be interesting and valuable, and she might learn something new,” Flier explains.
The Board of Fellows Nominating Committee meets annually to review and approve a slate of candidates for the board, and in Holmes’s case, Flier decided to extend an invitation after informally consulting with a few other board members.
“We were interested in some younger people, we were interested in women, we were interested in people with entrepreneurial activity, and she fit the bill,” Flier says.
Until It Was Too Late
But one board member who wasn’t included in these discussions knew something about Holmes that the others didn’t.
Phyllis I. Gardner first crossed paths with Holmes in 2003 when the now-disgraced founder was an undergraduate at Stanford, looking to share her idea for Theranos with an expert in the medical field. During this time, Gardner says she became “the early skeptic” of Holmes after observing her “extraordinary egoism” and “air of invincibility” first-hand.
“She came to me with this weird idea, a very weird idea,” says Gardner, recalling Holmes’s initial pitch, a precursor to the vision of Theranos. “And I kept telling her that’s not going to work. It wasn’t the idea she ultimately commercialized, but she had no knowledge.”
Despite her past with Holmes, Gardner was never consulted prior to Flier extending the Board invitation to her. When Gardner learned that Holmes was to join the HMS board, she says she privately lobbied the Development Office to expel her, pointing to the fact that Holmes was under investigation at the time. She says that in response, she was told that Holmes would be treated as “innocent until proven guilty.”
“She was put on the Harvard Medical School Board by a nominating committee of three powerful people who hadn’t done their due diligence,” Gardner says. “It was hard for me. I begged them not to put her on and it was too late.”
In retrospect, Flier says he should have consulted Gardner, but says he didn’t realize that she and Holmes had a prior relationship until it was too late.
“The reality is that I wish I had asked, but I didn’t even think of the connection,” Flier says. “It just didn't occur to any of us.”
A few weeks later, Gardner’s suspicions about Holmes were publicly vindicated.
The morning of Holmes’s first meeting as a member of the board, the Wall Street Journal published its first front-page exposé by journalist John Carreyrou, who would go on to write “Bad Blood: Secrets and Lies in a Silicon Valley Startup,” a book about Theranos’ fall from grace. Gardner was quoted as a source in Carreyrou’s article.
The story interrogated the validity of Holmes’s technology, publicly planting the first major seeds of doubt in Theranos and casting Holmes’s burgeoning empire as a potentially fraudulent operation.
When Flier introduced Holmes to the board, he hadn’t yet read the article and recalls he “didn’t know what to think, but we welcomed her.”
“You can imagine these are all very smart, well-connected people. The word was being whispered around the room for those who hadn’t read the Wall Street Journal already that this had happened,” Flier says.
In a 2019 op-ed for the British Medical Journal, Flier wrote that despite the tension, “Elizabeth remained unimaginably calm and unflustered” during the two-day meeting, though “everyone talked privately about this cosmic anomaly.”
‘It’s All Gonna Blow Over’
At the first Board of Fellows meeting after Holmes joined, Gardner says she sat with her “arms folded and scowling,” face-to-face and across the table from Holmes.
When she was introduced, Gardner remembers that everyone applauded her, except Harvard University Provost Alan M. Garber ’76 and President Drew G. Faust, who sat “stone-faced,” just like Gardner.
“They were embarrassed. You know, it’s an embarrassing situation for everybody,” says Gardner.
Nonetheless, Holmes “didn’t seem embarrassed,” she says. Instead, Holmes spoke in her trademark “low voice,” which Gardner believes was “cultivated,” as it differed significantly from the tone of voice she remembered her having at Stanford.
“It was a very fraught moment. And of course, I was supporting Harvard, but I was not supporting Elizabeth Holmes or Theranos because I had knowledge that a lot of people didn’t about what was happening,” Gardner says.
Several hours into the meeting, Holmes left and didn’t come back, according to Flier. She was expected to return for a large dinner reception that night, where the seating arrangements would place her at the head of the table next to Flier. But as rumors swirled about Theranos, Holmes’s chair remained conspicuously empty.
Only after the appetizers and main course were served did Holmes arrive and take her seat next to Flier. He says they exchanged pleasantries and she apologized for missing the rest of the meeting, citing several television appearances she had to attend that day.
“It sounds like this is a major complication for you,” Flier recalls saying to her. “And she said something like, ‘Oh it’s really nothing, it's all gonna blow over. It’s a very uninformed article.’”
Throughout the dinner, Flier says Holmes “defended herself” and “behaved as normally as you can imagine a person behaving.”
When Gardner saw Holmes at the head of the table, she says she thought it was “par for the course” to see her “leaning in, sucking up to a powerful older white man.” Her behavior reminded Gardner of how Holmes had defrauded dozens of Theranos investors who, blinded by the allure of her empire, “fell for her” and failed to do due diligence.
‘Getting Burned by the Hot Iron’
In the aftermath of the exposé and months of investigations that followed, the Board grappled with an internal debate about whether to keep Holmes “on the board for a while out of fairness and due process” or request her resignation in order to “limit potential institutional reputational damage,” Flier wrote in a blog post.
Gardner says that despite mounting evidence, most board members were “not convinced at all” that Holmes was a fraud and should resign. “They didn’t do due diligence,” she says.
Some women on the board even asked Gardner if she was “embarrassed” about being quoted in the Wall Street Journal exposé and expressed concern that it would be “embarrassing” for them not to support Holmes on the Board as a female entrepreneur, Gardner recalls. “How could you not support a woman?” she says they asked her.
“I’m totally women-oriented, but not for her, not for a fraud! And by the way, I was proven right,” Gardner says. “She was a fraud. She is a fraud.”
At first, the majority of the board opposed requesting Holmes’s resignation, Gardner says. But as more information became public, Flier wrote in a blog post that “the balance decisively swung,” and he asked a trusted friend to quietly ask Holmes to resign from the Board of Fellows.
“In retrospect we made a mistake in asking her to join despite her winning awards and gaining broad attention, we corrected the mistake in a reasonable time period allowing facts to emerge, and there was no harm to the school apart from understandable (and brief) embarrassment that this happened,” Flier wrote in an email.
Just three years ago, Flier, now retired, wrote in a blog post that his involvement in “Theranos-gate” taught him that more due diligence is needed, even for non-fiduciary boards like the HMS Board of Fellows.
In the same post, Flier also acknowledged the challenge of balancing due diligence with expediency when recruiting desirable candidates. “On the other hand, convincing great people to join such boards is critical to the health of many not-for-profit institutions, and sometimes you must strike while the iron is hot to engage them,” he wrote.
“To avoid getting burned by the hot iron, both diligence and good fortune are required,” he added.
“Though this was never before a problem, and in most circumstances like it would not have been — she might have become the next Steve Jobs — broader socialization of new members and greater deliberation is important, perhaps more than I had realized.”
Today, when asked if any changes need to be made to ensure that a Holmesian imbroglio doesn’t happen again, Flier responds, “No, I don’t think any more steps are needed. I think the process — other than what happened with her — the process that I had to name 10 or 15 people to the Board worked out exceptionally well.”
“It’s a great board. It’s dedicated. The new dean is terrific. It’s a great board. I have no regrets, other than that aberration,” Gardner says.
Elizabeth A. Holmes’s legal team did not respond to a request for comment.
— Magazine writer Sophia C. Scott can be reached at email@example.com. Follow her on Twitter @ScottSophia_.