Chapter 2: The CSR Mask of Corporate Irresponsibility: Inside the Historical Case Anatomy of Theranos’s CSR Rhetoric and CSI Practice

This chapter investigates the trajectory of Theranos to demonstrate how CSR discourse and CSI practices may co-exist as strategically intertwined outcomes of executive decision-making. Established with the stated mission of democratizing healthcare through minimally invasive diagnostics, the company cultivated legitimacy by leveraging visionary storytelling, elite endorsements and high-profile partnerships that projected responsibility and innovation. Beneath this carefully constructed façade, however, Theranos engaged in systematic deception, relying on secrecy, staged demonstrations and legal intimidation to obscure persistent technological failures. Employing the Fraud Diamond framework in conjunction with signalling and legitimacy theories, the analysis reveals how pressures for performance, opportunities facilitated by weak oversight and deferential governance, rationalizations embedded in entrepreneurial ideology and leadership capabilities marked by charisma and coercion converged to sustain misconduct. Initially, CSR narratives operated as costly signals that generated reputational buffers and pooling equilibria, effectively delaying detection. Once whistleblowing and regulatory counter-signals emerged, legitimacy collapsed across pragmatic, moral and cognitive dimensions. The case illustrates that CSR can serve not only as a protective mechanism but also as an enabling infrastructure for irresponsibility. Rather than viewing Theranos as an exceptional failure, this chapter situates it as a paradigmatic case of moral ambivalence, highlighting the need to theorize executive behaviour under bounded rationality and institutional pluralism, and offering broader implications for corporate governance, accountability and the study of misconduct.