The “Business Casual” podcast episode delves into significant changes at UT Austin McCombs, which recently terminated its 40-year partnership with the Consortium for Graduate Study in Management. The hosts, John Byrne, Maria Wich-Vila, and Caroline Diarte Edwards, unpack the implications of this decision, set against the backdrop of former President Trump’s opposition to Diversity, Equity, and Inclusion (DEI) initiatives. This move raises concerns about the future of diversity in business education, as the Consortium has played a pivotal role in supporting over 12,000 minority students and securing substantial scholarship funds over its 57-year history.

John, Caroline, and Maria share a unified perspective on the importance of diversity in business schools. Caroline emphasizes that diversity enhances the classroom experience and peer learning, benefiting all students. She raises the possibility that other institutions might follow UT’s lead, potentially impacting other influential organizations like Management Leadership for Tomorrow and the Forte Foundation. This concern highlights the broader risks to diversity initiatives nationwide.

Maria bolsters the discussion by pointing out the proven benefits of diversity, such as higher investment returns and better ideas. She underscores the irony of criticizing DEI scholarships as “unfair” when they aim to rectify systemic disadvantages faced by underrepresented groups. Importantly, she notes that Consortium support isn’t exclusive to minorities; it extends to anyone who champions diversity, showing its inclusive approach. This episode serves as a poignant reminder of the vital role diversity plays in enriching business education and its far-reaching benefits.

Episode Transcript

Note: This transcript was generated by AI and may contain minor inaccuracies.

[00:00:06] – John

Well, hello everyone. This is John Byrne with Poets of Quons. I hope you had a great July fourth. You are listening to business Casual, our weekly podcast with my co-host, Maria Wigvilla and Caroline Diorkey Edwards. The big news over the July fourth holiday was actually something that’s quite sad, according to us. Ut Austin Macombes, one of the best public university business schools in the country, quietly ended a 40-year partnership with the Consortium for Graduate Study and Management. Now, what is this all about? It’s really about Trump’s war on DEI. After Trump has threatened a number of universities’ withdrawal of federal funds over this issue, Texas found it necessary to walk away from the consortium, which essentially encourages and supports and helps underrepresented minorities attend business school. This has been an organization that has done a lot of good over the years. It has a great track record. Ut is one of many members. Currently, there were 24, now there are 23 member schools. Over all the years that the consortium has been in business, it has helped over 12,000 minority students. It’s also helped them secure more than $655 million in scholarship money. Annually, it helps over 700 students as the annual intake There are currently over 1,200 students in the program.

[00:01:49] – John

It has the support, incidentally, of more than 80 Fortune 500 corporate partners who help these students understand what the job opportunities that will be available to them once they graduate and what kinds of jobs will they have and what will they do in those jobs. These companies are very much devoted to having a diverse workforce. The consortium has been around for 57 years. This is a big piece of news and a sad one because even for UT Austin, incidentally, in the class of 2025, the MBA class, there There were 37 students who were members of the consortium, roughly 15% of that entire cohort. Caroline, what do you make of this?

[00:02:38] – Caroline

It’s a very depressing development, as you’ve outlined. It’s an organization that has achieved a great deal over the decades. And it’s very sad to see that momentum being stymied, and it makes you wonder what is going to help at other schools. Are other schools going to follow? And then there are other organizations that could potentially be affected. Mlt, Management Leadership for Tomorrow, the Forte Foundation. These are organizations that have had a tremendous impact on business education in the US and diversifying the classroom. And that diversity benefits everybody, not just the students who get access to an education that they might not otherwise have had and go on to achieve great things, but also their classmates who benefit a great deal from the additional perspectives that a diverse classroom brings. And of course, business school is all about peer-to-peer learning. So the composition of the classroom has a tremendous impact on the learning experience for everybody. So if we’re going to start rowing back on having diverse classrooms, it makes a poorer learning experience for all.

[00:03:49] – John

Yeah, very true. Maria, your take?

[00:03:52] – Maria

Yeah, I completely agree with all of this, obviously. I mean, we’ve talked many times in this podcast over the various studies that show that diversity isn’t just a Kumbaya, rainbows, and unicorns wishful thinking. That diversity, when you put diverse thinkers together, people with diverse backgrounds together, the results almost always speak for themselves, right? You have higher investment returns, you have better ideas being generated. So we don’t need to rehash the benefits of diversity. But I think that this this structural attack against framing these DEI scholarships as, quote, unquote, unfair hair is just the height of hypocrisy and irony. I mean, these are scholarships meant to help people who are faced unfairness in so many other facets of life, simply being judged based on their backgrounds or their ethnicity. Or in the case of Forte, I know that this is not about Forte, but one can’t help but wonder if Forte might be next in the crosshairs, the assumption of gender that, Oh, you’re a woman, so that means that you can or cannot do certain things. And so these scholarships have just been so transformative in helping people get access to a level of education and then go on and contribute to society in a way that they wouldn’t have otherwise.

[00:05:14] – Maria

And I do want to point out that membership in the consortium, you do not actually have to be a minority to get a consortium scholarship, as long as you have shown that you have committed to the mission of helping improve the representation of diverse people. I’ve had clients who are white, white, upper class people who have gotten these scholarships because after college, they dedicated their careers to working in inner city classrooms and things of that sort. So this idea that, Oh, the consortium is just for people of color, is actually not entirely true. People of all kinds of racial and ethnic backgrounds have gotten consortium fellowships. So that makes makes the attack on it even sadder. And yeah, I wonder if I think other schools… I wish I could say, Oh, man, it’s only UT Austin. What a shame. I think other schools are absolutely going to follow. I think they’re not going to have much of a choice. And I think the State schools are probably more likely versus the private universities just because they’re not going to want to attract the ire of the federal government. But yeah, I don’t know what’s next.

[00:06:25] – Maria

I will note that a lot of the funding for the consortium does come from these corporate partners as mentioned. And so my hope is that those corporate partners find other ways to funnel those resources to or through the consortium, even if it has to be re-arranged or done through a different name or through different means. But hopefully somehow this work can continue.

[00:06:48] – John

Yeah. And to your point about public universities being under more pressure, and that is especially true in a red state or a state with a Republican governor who wants to toe the line of the Administration. It’s worth noting that just before this decision occurred with UT McComes and the consortium, the President of the University of Virginia felt the need to resign because of a Department of Justice investigation into their DEI practices. The DOJ claimed that UVA’s board had voted to eliminate all of its DEI efforts, and in fact, it did, and that, in fact, what the President did was simply rebrand them and keep them in place and threatened to take away all the federal funding and also sue the university to prevent the university from going through that, Jim Ryan, the President, walked away. Incidentally, in that dispute, the Darden School came up. So did the McEntire School of Commerce very publicly because one of the special advisors, probably the most important advisor in the White House today, is a guy named Stephen Miller, who founded an organization in between the two Trump administrations to bring legal action against schools and companies for DEI initiatives.

[00:08:16] – John

That organization had filed a very long brief with the DOJ, encouraging the Justice Department to investigate the University of Virginia, siting both the Darden and the McEntire Schools in that report. I think you’re right. I think we’re going to see more schools follow, which is a real shame. The other interesting aspect of all this is that the consortium has been mummed. No word at all from the consortium. We’ve contacted it several times. Can’t get them to give us a response. Ut is quiet. Now we are surveying all the other member schools to see, Okay, well, what are you going to do? Sure, it’s the fourth of July holiday, so we’re going to give them all some grace because after all, people are busy, people are out. But I can’t help but walk away from the fact that people are so terrified by what could happen in terms of legal action or Department of Justice investigation or political pressure that they don’t even want to respond. They don’t want to respond with some statement of support for the consortium and all the good that it does, or the consortium itself doesn’t even want to stand up for what it believes.

[00:09:30] – John

Because if I was the head of the consortium, frankly, as soon as this happened, I’d be out there publicly defending the organization, all the good that it’s done, and decrying this pressure that an administration has put on these universities to kow-tow and eliminate every possible DEI initiative that they have. I mean, Caroline, are you surprised by the silence over this?

[00:09:55] – Caroline

Well, there are arguments to be made also for keeping a low profile in the hope that you will attract fewer attacks. Perhaps their strategy is to try to keep operating and not attract too much attention. I mean, clearly, as you say, free speech is under attack on so many fronts. We’ve also seen this at the university level. Some schools are speaking out like Harvard and making a big splash about standing up against Trump. Other universities are trying to keep a low profile. I would include Stanford in that bucket of schools that are trying to not attract too much attention and not making a big hoohah about what is happening right now in the hope that it will mean that they don’t attract as much attention from the Trump administration. So you could call that cowardice, or you could say it’s pragmatism, and they are trying to do the best they can under the circumstances or their stakeholders. And if you think about how this could evolve and what is the future for these organizations like the consortium, perhaps they will need to operate at some arm’s length to some business schools, or perhaps all business schools.

[00:11:17] – Caroline

Perhaps they can continue to operate with private funding, as Maria said, with those corporate sponsors. But given that Trump has banned DEI and that is linked to federal funding, perhaps it’s just not going to be possible for educational institutions that have federal funding to continue to have an official partnership with organizations like the consortium, like MLT, like Forte. But those organizations can continue to support candidates applying to business school through private funding. You could imagine a scenario where candidates can continue to get support from those organizations, but there is no separate route for applying as a candidate with that backing. Perhaps there’s going to be some separation there. It’ll It’s really interesting to see how this evolves. Certainly not a positive evolution, but hopefully there’s a way that they can continue to operate.

[00:12:22] – John

If you were an African-American or a Hispanic or Native American and you had intended to apply to UT M Mccombs before it was true from the consortium, would you still apply? My advice is yes, because McComes, probably, to be totally honest, will feel even a greater need to act on its own without the funnel that the consortium provides to help schools diversify their cohorts. On some level, I bet you, you may even have a better advantage. The issue will become scholarship money. That’s the problem because it would be very It’s difficult for McCombs to give preferential treatment to minorities for scholarship funds, given the pressure on it today. Okay, so Maria, let’s say you’re CEO of the consortium. How would you be reacting to this development?

[00:13:15] – Maria

Well, I think that I would also not come out with any bold statements, yet as tempting as it would be, especially not just as the hypothetical President of the consortium, but as the non-hypothetically Maria, my gut feeling would be to immediately issue a screed. I know you were.

[00:13:33] – John

You’re a street fighter.

[00:13:34] – Maria

I would personally attack Steven Miller. No, I’m just kidding. That would be the email that I draft in the drafts folder and I never send. That’s my anger management technique, is I write the really angry email with no one in the two box for the email, then I just delete it. No, I do not blame them at all for being cautious. I think what I would be doing right now is I would be rapidly reaching out to my remaining members. I would also be rapidly reaching out to my corporate partners and saying, Okay, how can we continue this mission, even if we have to change the way in which we do it? So perhaps what I think would probably happen is that the consortium scholarship would be a separate scholarship that you apply to as opposed to the one-stop shop application infrastructure that exists today. I think that might have to go away, perhaps. But if it becomes a scholarship program that you apply to alongside business school or after you get into business school, I don’t know. And if they make it very, very clear, you don’t have to be a minority to get this scholarship.

[00:14:45] – Maria

And maybe they brought in some other other language, I think that’s probably a way for them to continue to offer this financial support to people who need it, but without attracting the ire of certain folks in the federal government.

[00:15:00] – John

Yeah, true enough. Let me raise the essential question that the Trump administration is raising here because I think it’s a provocative question. Are these programs prejudicial to certain members of society, i. E. Asian-americans, white males, or are they not prejudicial? Caroline, what do you say?

[00:15:24] – Caroline

Well, I don’t think so because I don’t think that schools were accepting Canada candidates that weren’t well qualified for their programs. It’s more about creating a level playing field for those candidates who come from backgrounds where they haven’t had the same advantages of some of the more privileged members of society. I think that’s the wonderful thing about the consortium and organizations like Forte, that they are building up a pipeline of candidates, of fantastic candidates for business school who are extremely well qualified, have the ability to flourish in the classroom, go on to achieve great things post MBA. That’s a great benefit to the schools as well as to those individuals. I don’t think that they are putting anyone else at a disadvantage. It’s more about creating a level playing field for all.

[00:16:22] – John

Yeah. It’s worth noting that back in 1966, when the consortium got its start, it occurred because there was a professor at Washington University in St. Louis, a management professor who looked at all the people in senior management of Fortune 500 companies. Back in 1966, there was not a single Fortune 500 company that had an African-American in senior management, not one. That professor felt the need to create this network of universities and the pledge to help Black students earn MBAs and enter corporate leadership pipelines. Let’s just admit, even today in both MBA programs in senior leadership in corporate America, there is a very low percentage of African-Americans, Hispanic, and Native Americans who are in business schools, who have corporate roles in leadership, never mind senior management. While A dent has been made. We’re not talking about something that still is representative of the overall population, not remotely at all. What help can be given people who are, who don’t grow up with two professional parents sitting around the dining room table every night talking about what they do at work and having the benefit of tutors, great schools, admission consultants, and other resources that many others do not have.

[00:18:07] – John

This is a real help for them, and they need it and they deserve it. And we’re all on board with it. And it’s just a shame that this is happening right now.

[00:18:22] – Maria

So when you talk about the fact that the consortium has been around for so many years now, and there is still a lack of African-American American, Latino leadership, even female leadership in the C-suite, to me, that actually points to the fact that it only shows that we need these programs because it points to the fact that there are systemic barriers, that once you get out into the workforce, it doesn’t matter if you have a Harvard MBA or a Stanford MBA, you get out there and you’re still going to be underestimated. Your contributions are still going to be discredited or given less credence. And so that, to me, if anything, it shows that when people talk about these systemic barriers, maybe there’s something to them. Because if it really were a level playing field, then all of these graduates from these top business schools who have benefited from the consortium, there would be a commensurate representation in the C-suite of the Fortune 500.

[00:19:18] – John

For sure.

[00:19:19] – Maria

Regarding the issue of fairness, various studies have come out and shown that teachers through the K-12 system, they have a bias bias where they believe that certain types of races tend to overperform. And so they judge those students more favorably in a way that is subjectively, perhaps unfair. So there are a number of studies out there that have been done by these education researchers that show that if a teacher has a certain underlying bias, even though they don’t think they have it, right? Very few people think that they have these biases. But they’ve shown that in the classroom, if a student from a more privileged racial group makes a comment, for example, the teacher is more likely to be like, Oh, that’s a great comment, versus if someone from more of a minority group makes that same comment or comment of equal quality, it is seen as being less relevant or less good. So that’s a proof of this enduring systemic disadvantage. So when you talk about, Oh, does it give people a disadvantage that they get a a separate application and they might get some extra scholarship money? I don’t know. The studies seem to show that some of these disadvantages have been experienced since pre-K in kindergarten and all throughout the grade school years.

[00:20:45] – Maria

So when I see studies like that, I think, this tilts me towards the, well, who’s got the bigger advantage in the overall ecosystem?

[00:20:56] – John

True enough. Well, we hope the consortium stays in business, gets stronger. We hope fewer schools, if any, follow this lead. And we hope this is just a temporary setback, even for McCombs and the consortium, and that once this administration is gone, they’ll rejoin and just resume things as they have been. This is John Byrne with Poets & Quants. You’ve been listening to business casual.