Forget Hanover - what matters is chairman's performance now.
Zut alors! Shareholders chucking out an executive chairman of a listed company? This is pretty much unheard of in our wee, cosy, little back-slapping hamlet of a business community.
We just don't do it, not even to directors who fall asleep in a puddle of dribble at meetings. But, next week, shareholders in listed children's clothes company Pumpkin Patch are going to decide whether to reappoint Greg Muir as executive chairman and there is a strong move from some to vote him out. And not because he's a dribbler.
The weird thing is, they are not aiming to biff Muir because they believe he is munting the company - perversely, we seem happy to tolerate that, no probs, in many inglorious examples from Fletchers to Brierleys. Nope, in this case Muir may get the boot because he was the chairman of a separate failed company, Hanover Finance, from 2005 to 2008.
There have been no charges laid against any of the directors of Hanover and Serious Fraud Office director Adam Feeley told me point blank, in spite of my impassioned arguments to the contrary, that there was nothing which indicated the SFO should even open a file on the Hanover case.
Yes, investors in Hanover still have steam coming out their ears. Yes, Muir is associated with this failure. Yes, Muir must cringe when he is reminded that he described the company's 2007 results as "superb". Yes, it is healthy for shareholders to hold directors to account.
But steady on. Surely Muir should be held responsible for the performance of the company in which shareholders actually hold shares? Is Muir providing value at Pumpkin Patch? On this measure he doesn't seem too dribbly.
Although Pumpkin Patch had to retreat from its expansion into the United States at a cost of about $20 million, that blame can't be laid solely at Muir's door - the US is a notoriously difficult retail market to crack - and in other areas, including wholesale, which Muir personally oversees, the company's pimped-up kids clobber is doing well.
Since 2008, Pumpkin Patch has produced total market returns including capital and dividends of 66 per cent. I got that from Brian Gaynor's column. Gaynor is one of the shareholders who wants Muir out.
Bruce Sheppard is another commentator who thinks Muir should go. Back in 2008, Sheppard wrote a treatise on "personal brands", saying Muir knew he was selling his good name to try to give Hanover's Mark Hotchin and Eric Watson a figleaf of credibility.
Sheppard knows about the power of personal branding - the activist with the silly hat has zhuzhed up to become part of the establishment - and he is dead right that perception can become reality.
But have we gone too far in our emphasis on how things look? When everything is about image, any director's value is tenuous and can be destroyed in a snap.
But if reputation is also about substance, then what counts are real skills, tangible achievements, actually doing the business - not just how you look. Pumpkin Patch shareholders' hearts are in the right place but judgment of directors should be done with one's head.
Shareholders would be better off jettisoning their self-righteousness and thinking coolly about their own investment. If they really think Muir needs to redeem himself, let him do so by making shareholders more Pumpkin Patch profits.
dhc@deborahhillcone.com
