Mark Hurd didn't get very good grades for his performance Friday. The Washington Post ran a story on Saturday quoting disapproving corporate government types.

Charles M. Elson, leader of the corporate governance center at the University of Delaware, said HP's culture "needs to be seriously reexamined and completely reworked."
"It is inconceivable to me that top management could have been aware of this kind of activity and not taken steps to separate the company from it," Elson said. "Large organizations are based on ethics and integrity, and the tone comes right from the top."

Given that Hurd admitted to approving the sting operation on Dawn Kawamoto, and that he managed to avoid exposing himself to a report that would have apprised him of a range of unacceptable behavior, will Hurd be able to maintain leadership of the company that was once the definition of integrity in Silicon Valley?

For some perspective on that, I contacted Michael S. Malone, longtime Valley reporter, and the author of an upcoming book on HP, "Bill and Dave: How Hewlett and Packard Created the Greatest Company in the World," to be released this spring. Malone thinks Hurd will "dodge the bullet."

There's no paper trail showing that he signed off on the pretexting. And his behavior -- getting a verbal summary of the investigation at a meeting, but not reading the final report -- is consistent with the behavior of a CEO. He got the executive summary of things, Dunn was running the show, and he waited to hear the results.

Setting up a sting on a board member is stupid, but not illegal. So, unless there is something with his signature on it, or a witness who was in the room saying that he was informed of illegal activities, it'll be hard to make a case. No resignation; but the reputation of HP has been severely damaged on his watch. So, even if he's not out the door, he is on thin ice.

I'm not so sure. While it would be stupid for HP officials like Hunsaker and Gentilucci to fail to protect Hurd from knowledge about their illegal activities, they did an awful lot of stupid things and emails clearly show that they sought a meeting with Hurd. Indeed, Hunsaker emailed Dunn that Hurd had approved the sting operation. So while Hurd should have been protected, it's entirely within the realm of possibility that Hurd was clued into the pretexting, and that HP was skating on thin ice in its investigation.

There is still plenty more dirt to come out before this is all said and done and plenty of work for crystal balls. Malone's says Dunn will get some kind of fine, Sonsini a slap on the wrist from the Bar, and Hurd walks away, wounded but clean.

Mine says: Hurd goes down, Dunn, Baskins, Hunsaker, Gentilucci, DeLia and the smaller guys all face criminal charges, HP faces years of shareholder lawsuits and government investigations.

When the corruption starts at the top, you have to clean house with a firehose. HP needs a fiercely independent board who share a vision of returning HP to its proper place at the pinnacle of both integrity and performance. Because the connection to its storied past is so important, Walter Hewlett should return to the board, and no board member who countenanced Dunn's covert operations should remain. Perkins should return. Whether Hurd should remain is, I suppose, an open question; but to my mind his approval of a sting operation on a reporter makes him deeply suspect, no matter how nifty his turnaround of the company over the last five quarters.