My summer reading list has been rebranded my fall list (feel familiar?), and so I’m still thinking about the Theranos scandal after my rereading of John Carreyrou’s book – particularly: how did the boards of Theranos, Walgreens, and Safeway (the latter two of which had partnership agreements with Theranos) all fail to recognize a giant con, despite a trail of clues laid out like glitter in a kindergarten?

We expect boards of directors to sniff out risk and wrongdoing and prevent catastrophe. My suspicion (one that I am exploring) is that we generally expect too much from boards on this front. For complex global organizations, there are simply too many things to watch and oversee. Boards will always be hard pressed to find failures that regulatory oversight does not.

I’m have a hard time blaming a bank director in Toronto for not asking at the board table, “Hey, are we money laundering in Miami, by any chance?”

But the Theranos con should have unraveled years before it did, long before tests were being faked, regulators were duped with hidden rooms, and whistleblowers were threatened to stay silent. It hung together for as long as it did in part because of what I call a cascade of credibility. The Stanford dean of engineering says Elizabeth Holmes is brilliant, helping to pull in a couple of successful, moneyed tech royalty to get some initial funding. Others hear that Don and Larry put money in, and they want in too—because who wants to miss out on something Don and Larry obviously think is great?

Then a storied former U.S. secretary of state – no, make that two – join the board, along with a former Marine Corps general, a former secretary of defense, and a former senator. (Did I mention Logan Roy?) Well, gee, if these clearly accomplished and well-respected name brands are on the board, then of course this must be a great company that I should definitely invest in.

Except. None of them knew what they were talking about. None were doctors or experienced biotech investors, nor did they know much about regulated industries. Everyone just assumed that the people before them had done their due diligence – that someone smart, somewhere along the line, had checked it out. Credibility begat credibility, until everyone was in so deep that they simply could not – or would not – see that they had all been taken for a few billion dollars.

That notion of a cascade of credibility came back to me last night when I was reading an insanely good piece of reporting from the New York Times on how JP Morgan enabled Jeffrey Epstein for years despite a paper trail of sketchy cash withdrawals. Here’s the sentence that jumped out at me at 3 a.m. when I couldn’t sleep:

“Epstein relied on his network for his legitimacy,” [Jes] Staley answered. “And I, as running the largest investment bank in the world, was part of that network for him.”

The article says that at one point, Epstein dropped Bill Gates’ name as a character reference when JP Morgan folks were trying to decide whether to drop him as a client. The conceit being – how could I be a criminal if I have so many friends with stellar reputations and I keep bringing you new clients and opening doors? (Of course, not all of Epstein’s friends had stellar reputations.)

With both Holmes and Epstein, if people had done their due diligence – instead of squinting to keep the sunshine out and buying into the cascade of credibility – these stories would have unraveled years earlier.

Now let’s go back and imagine we were on the board of Walgreens, which poured more than $100 million into its partnership before abandoning it in 2016. Should we have known that the directors of Theranos were either duped, duplicitous, or both?

There were a lot of clues that should have been obvious to the Theranos board. By the time Walgreens got involved though, the lie was much more sophisticated and harder for the its board to suss out, but there were certainly clues.

Here’s the embroidered and bedazzled red flag for me: who was not on Theranos’s board? Holmes was the only woman. A biotech company with no directors or investors who had expertise in biotech. Just a group of mostly older white men who brought their credibility.