Role Plays: Board Process Simulation

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The role plays
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Real-life scenarios

This series of simulations, or role plays, was created by Stanislav Shekshnia, Affiliate Professor of Entrepreneurship and Family Enterprise at INSEAD.

The learning objectives are to experience the dynamics of a board of directors and to understand the systemic nature of boards and board-management interaction. Multi-lens and cross-functional approaches to decision making can be explored and participants can learn how to collaborate with people who have different backgrounds and agendas.

AuthorsBoard Process Simulation (A)

The EnCom board has to consider a management proposal to acquire a significant stake in a new power plant in Pontia, which belongs to a multi-industry concern owned by a prominent local family.

If approved, the deal would be the first international move made by EnCom, a five-year-old $2 billion energy company, and a market leader in its home country of Umania in Eastern Europe. The complexity of the deal is unprecedented for EnCom.

Board Process Simulation (B)

Indian student

One of the four scenarios explored in this simulation includes the following memo to EnCom’s chairman from the owner and founder of MKM, EnCom’s mother company:

Dear CEO

I know that the EnCom board will consider an investment project for entering Pontia’s market at its next meeting.

You and other directors are much better informed about the parameters of the deal and risks associated with it than I am, and the last thing I want to do is to interfere in the board process. But I would like to bring your attention to the two points which are critical for me:

1. EnCom needs to become an international company and I am confident it will happen sooner or later. I think that Pontia is a very promising and a very difficult market at the same time. We have never worked there, but we know how to operate in less-than transparent markets. EnCom has never worked outside Umania and it needs to start somewhere.

2. I will not tolerate another “North America”.

AuthorsBoard Crisis Simulation (BCS)

This simulation (which is separate to the Board Process Simulations outlined above) explores a situation faced by SOKOL’s new chairman. His experience includes an INSEAD MBA, 15 years in the investment industry, five previous directorships and two chairman’s jobs.

After a period of hard work in his new role, the chairman was proud of his accomplishments. He felt that the board had everything it needed to fulfil its mission: to build a world-class company by providing strategic direction and oversight to management.

But then one morning, the chairman received a phone call from one of SOKOL’s founders:

Did we wrong you?

What do you mean?

I am asking: Did we do anything wrong to you?

Why are you asking?

Because you are destroying our business!

The author
Authors

Stanislav Shekshnia

Stanislav explains why role play offers students an experience that combines both rational and emotional decision making and is therefore, he believes, much closer to real life than more traditional cases.

Emotional pressures

Business cases are great as exercises in rational decision making. However, participants don’t feel the emotional pressures that an executive feels. With role play, participants can act out their roles, interact with each other, make decisions under pressure, and try to persuade their colleagues to support them. This format combines the rational and emotional in decision-making.

Directors’ skills

Role play is particularly effective for learning director’s skills because it involves the collective work of many participants. Boards of directors are collective decision-making bodies and it’s very hard to learn to make such collective decisions without actually doing it.

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Engaging mature students

Simulation is better suited for mature students – people with status, experience and self-esteem – as they prefer playing a ‘real game’ to discussing cases that are about other individuals and companies. They need to be engaged and a simulation creates this engagement. I can also see BPS as a core element of a corporate governance elective course for MBA participants.

Right or wrong answers?

The goal of the simulation is for participants to experience a real board meeting and pre-board work. The focus is primarily on the group dynamics, what we call the ‘board process’. It does not mean that actual outcomes – the board’s decisions – are not relevant, but they are secondary.

However, where no decisions are made, or if there are resignations following a simulated board meeting, then it is clear that something went fundamentally wrong and this would need to be addressed.

‘Final exam’

We use Board Process Simulation (BPS) as a sort of a ‘final exam’ for people participating in the International Directors Programme at INSEAD. As well as learning the skills they need to operate efficiently as a board member they can also observe their colleagues’ successes and failures. We believe it helps to have a more realistic picture of oneself and to  ‘steal with pride’ some tools and tricks from colleagues. 

Authors

Find out more from Stanislav about BPS and the International Directors Programme at INSEAD

Read an interview with Johannes Luef, Consultant and Certified Independent Non-Executive Director at INSEAD, who took part in a BPS.

About the author

Stanislav Shekshnia is Affiliate Professor of Entrepreneurship and Family Enterprise at INSEAD. He is a contributing faculty to the INSEAD Corporate Governance Initiative. 

stanislav.shekshnia@insead.edu

 
Interested in finding out more?
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Download the role plays

Educators can login to view free inspection copies.

Board Process Simulation (A)
Ref 313-102-1
Board Process Simulation (B)
Ref 313-103-1
ENCOM Board of Directors Meeting
Supplementary software for simulations (A) and (B)
Ref 313-102-4
Board Crisis Simulation (BCS)
Ref 314-075-1
Board Crisis Simulation (BCS): Profiles
Ref 314-075-4

 

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