Should convicted directors be stripped of their honours?

There was a development in the long-running Lombard Finance collapse saga today that has the potential to send shock waves throughout the establishment, in New Zealand and throughout the Commonwealth. Reports are emerging that Sir Douglas Graham, esteemed politician, Treaty of Waitangi negotiator, company director and knight of the realm may be stripped of his knighthood following a conviction associated with the collapse of Lombard. This is huge.

Should honours recipients that are subsequently convicted through a judicial process have their honour stripped? On one hand, I applaud the New Zealand Government for considering measures to protect the status and sanctity of the New Zealand honours system. On the other, the knighthood related to Sir Douglas' services to New Zealand, rendered over many years, as I understand it, prior to the Lombard debacle. 

UPDATE 31/May: Yesterday, when I first posted, I fence-sat on this issue. Today, having read several commentaries and thought more deeply, my view has firmed in favour of stripping the honour. One is stripped of rank as a consequence of guilt in a military system, both as a punishment and to defend the honour of the rank. The civilian system is constructed on the same principle. Guilt and consequences should go together—always—lest justice no longer be consistent, fair and blind. What do you think?