Hewlett-Packard’s board stood behind now-ex-CEO Mark Hurd when a former erotic-film actress made a sexual-harassment claim against him. His record of remaking H-P into an innovator was a good one. But Hurd settled with the woman in a late-night meeting before the board got a chance to talk to her, and that act was too troubling for the board to allow Hurd to stay on, as was $75,000 in payments and expenses for the woman, Jodie Fisher. At least, that’s what members of the board say. Hurd’s quick resignation the next day did not prevent the PR fiasco that is the drama slowly unfolding: The former chief’s friends have countered the board’s story, dragging out the drama in a series of leaks. Hurd associates say he’d been encouraged to settle with Fisher for weeks before the agreement was made. His friends say the board overreacted to the sexual-harassment claim—even though the board found no wrongdoing on Hurd’s part—and was just trying to prevent bad publicity. If that’s the case, H-P is getting just what it hoped to avoid.