ARMAND BAM: The AACSB’s ‘Faustian’ diversity decision is an act of surrender

One of the world’s leading business school quality accreditation bodies, the US-based Association to Advance Collegiate Schools of Business (AACSB), recently removed diversity, equity and inclusion (DEI) from its guiding principles for accredited schools, after US President Donald Trump declared war on DEI in American society. Some states have enacted laws to ban DEI initiatives at educational institutions.

The AACSB’s decision to remove DEI from its reporting standards is emblematic of broader attempts to dissociate from meaningful engagement with systemic inequalities in education and business. The move, in response to political pressure, has been positioned as an effort to mitigate risks for its members. While unfortunate and in the interest of short-term favour, the reality for the AACSB is far more fateful. It is not a shift in language but a betrayal of the principles of transformative education. This Faustian bargain will leave a moral scar on the integrity of the association and those that follow suit.

AACSB accreditation is considered the gold standard in business education. It offers global recognition, and speaks to rigour and quality assurance in business schools and the commitment to excellence in teaching and research. For Stellenbosch Business School, accreditation enhances its reputation and provides credibility. It contributes to improved relations within industry and to attracting the best candidates for management education.

However, this prestige has always come with the responsibility of shaping future business leaders who understand the complexities of the global economy which are intertwined with issues of DEI. By succumbing to pressure and detracting from its commitment to DEI, the AACSB is signalling that diversity is expendable rather than essential to quality business education. To those in higher education, this is not merely an academic concern; it has real consequences for businesses, economies and societies that require ethically grounded and socially aware leaders.

In South Africa, the historical struggle against systemic exclusion remains unresolved, and the voices of discontented citizens should not be dismissed. Complacency is not an option. Those who claim to uphold democratic values and the South African constitution should not seek external backing from parties with little genuine interest in addressing our shared challenge of inequality.

We must remain vigilant and proactive in maintaining the course for restorative justice, ensuring that our educational and business institutions serve all rather than a privileged few. The recent controversy over student fees on our doorsteps shows that our work is far from complete. The fight for genuine inclusivity continues and business leaders and educators must resist any temptation to dilute or depoliticise the nation’s transformation agenda. It is our country and ours to make of what we want — if we can agree on what we want. If we fail to deal with these challenges head-on, we risk allowing the forces of regression to undo decades of progress. We need to consider the importance of developing business leaders who show the fortitude and critical consciousness to change their societies. As business schools, we must challenge this dilution of DEI efforts and never stop advocating for real, substantive change rather than sanitised, risk-averse rhetoric.

The AACSB’s decision to replace “diversity and inclusion” with “community and connectedness” is indicative of the growing trend of adopting more palatable, less confrontational language rather than addressing the root causes of exclusion. This is not neutrality, it is complicity — what Martin Luther King jnr called “negative peace, which is the absence of tension” rather than a “positive peace, which is the presence of justice”.

In the South African context, we have seen how euphemisms and avoidance strategies perpetuate inequality. The apartheid regime used bureaucratic language to justify systemic oppression, and today, corporate South Africa fails when it employs diversity discourse as a branding exercise rather than a commitment to justice. If the AACSB truly values inclusivity, it would not merely alter terminology but foster spaces for honest, critical dialogue about systemic barriers in business education. History has shown that symbolic gestures without substantive policy changes can lead to catastrophic consequences.

Consider the failure of affirmative action rollbacks in the US, where the Supreme Court in 2023 ruled to strike down race-conscious admissions policies at universities. This has resulted in declining diversity in elite institutions, reinforcing socioeconomic stratification. Similarly, South African broad-based BEE policies, though well intentioned, have often been exploited to benefit a privileged few rather than driving meaningful economic transformation. When organisations focus on ticking compliance boxes rather than fostering genuine inclusion, they not only undermine the policy’s intent but also entrench the inequalities it seeks to dismantle.

Yes, there might be a financial cost, but by bowing to the politicisation of DEI, the AACSB is setting a dangerous precedent for business schools worldwide. Institutions that look to the AACSB for accreditation will interpret this as a signal that diversity efforts are expendable rather than essential. This is particularly concerning for South African schools, where transformation remains a struggle. Our institutions cannot afford to follow the lead of US universities that fear political backlash more than they value justice. We have come too far to turn back now.

Education is never apolitical and to remain silent in the face of such oppressive thinking is to side with those exerting such power. Business schools are not merely training grounds for managers but institutions that shape the leaders of tomorrow. If those leaders are not trained to engage critically with race, gender, class and disability, we risk perpetuating the same cycles of exclusion that have defined global capitalism.

The impact on businesses will also be significant. Companies ill-equipped to foster diverse and inclusive workforces will find themselves at a competitive disadvantage. Research consistently shows that diverse teams drive innovation and better decision-making. By de-emphasising DEI in education, business schools will produce graduates who will lack the reflexive muscle to navigate multicultural, globalised markets, which will lead to decreased corporate adaptability and ethical blind spots in leadership.

AACSB president and CEO Lily Bi claims that this change is meant to “mitigate risks” and ensure long-term stability. But at what cost? Stability is a poor excuse for inaction in the face of injustice. True leadership requires the courage to challenge the status quo, even when it is uncomfortable. By stripping DEI from its principles, the AACSB is reinforcing the idea that business education should remain a tool of existing power structures rather than a force for equitable change.

The consequences of failing to address DEI extend beyond business schools and into global economies. The 2008 financial crisis was exacerbated by a lack of diverse perspectives in decision-making bodies, leading to unchecked risk-taking and a failure to foresee systemic collapse. On home soil, the Steinhoff saga provides us with a similar example.

In contrast, companies that have embraced inclusive leadership have demonstrated greater resilience in times of crisis. We should all remember that the exclusion of marginalised voices from economic decision-making leads to policies and practices that reinforce economic disparity.

Rather than removing diversity standards, the AACSB and other accrediting bodies should be deepening their commitment to meaningful transformation. This means calling on associates to, first, ensure that DEI remains embedded in their curricula.

Second, the AACSB and others should ensure that concrete and measurable outcomes are shared and not remain vague commitments to “community”. Third, business schools should be encouraged to engage in critical pedagogies that confront issues of privilege and power. And, finally, the AACSB should be that champion for creating opportunities where voices often silenced are given the space to be heard rather than allowing risk-averse decision-making to keep them silent.

South Africans know that symbolic gestures are insufficient without structural change. The dismantling of repressive regimes was not achieved through rebranding oppression; it was the result of sustained struggle and radical truth-telling. Business schools must follow suit, fostering an environment where difficult conversations are embraced.

The AACSB’s decision reflects a deep-seated fear of the very transformation that true education demands. This is not just an American issue. It has global ramifications. Business schools must resist the lure of depoliticising diversity and inclusion, for doing so turns them into institutions that reinforce, rather than reform, the status quo.

A truly transformative education does not merely produce business leaders who uphold existing structures but also cultivates those who challenge and reshape them. Diversity and inclusion cannot be reduced to rhetoric; they demand action, accountability and an unyielding commitment to justice. Without that, what we hold in our hands is not gold but pyrite — the illusion of progress without its true worth.

Dr Bam is head of social impact at Stellenbosch Business School, one of three South African business schools accredited by the AACSB