Separation of Powers: Definition and Examples

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Will Kenton
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Will Kenton is an expert on the economy and investing laws and regulations. He previously held senior editorial roles at Investopedia and Kapitall Wire and holds a MA in Economics from The New School for Social Research and Doctor of Philosophy in English literature from NYU.
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Updated July 25, 2024
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Michael J Boyle
Michael Boyle
Reviewed by Michael J Boyle
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Michael Boyle is an experienced financial professional with more than 10 years working with financial planning, derivatives, equities, fixed income, project management, and analytics.
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Separation of Powers: An organizational structure where responsibilities, authorities, and powers are divided between groups rather than being centrally held.

What Is Separation of Powers?

Separation of powers is an organizational structure where responsibilities, authorities, and powers are divided between groups rather than being centrally held.

Separation of powers is most closely associated with political systems, in which the legislative, executive, and judicial powers of government are vested in separate bodies. The term is also used In business contexts to refer to structures in which different positions hold distinct responsibilities.

Key Takeaways

  • Separation of powers is an organizational structure where responsibilities, authorities, and powers are divided between groups rather than being centrally held.
  • Separation of powers is most closely associated with political systems, though it is also often used in business contexts.
  • In the U.S. and U.K. separation of powers is reflected by the tripartite system, which provides checks and balances for the different branches.

Understanding Separation of Powers

Separation of powers refers to the division of powers into distinct branches of government, each with their own responsibilities. The intent of separation of powers is to prevent the concentration of unchecked power and to provide for checks and balances, in which the powers of one branch of government is limited by the powers of another branch. It aims to prevent abuses of power and avoid autocracy.

The most well-known example of separation of powers is the tripartite system found in the United States and the United Kingdom, in which there are three individual branches of government: the executive branch, the legislative branch, and the judicial branch. Each has distinct powers, though some states in the U.S. use the bipartite system, which assigns powers to two separate groups.

In the U.S., the powers afforded to the judicial, legislative, and executive branches are defined in the Constitution. Governmental authority is divided between the executive branch (controlled by the President), the legislative branch (controlled by Congress), and the judicial branch (controlled by the Supreme Court). For example, in the U.S., the executive branch nominates judges, the legislative branch confirms the nominations, and the judicial branch adjudicates on the constitutional merit of the laws passed by the legislature.

In business, the CEO and chair positions are often separated to prevent abuse of power.

While the separation of powers is most closely associated with politics, this type of system can also be used in other organizations. For example, there are good reasons to separate the positions of the chief executive officer (CEO) and chair, in order to increase checks and balances and give corporate governance real integrity. Because the board of directors’ main job is to oversee management on behalf of shareholders, CEOs who hold both roles are effectively monitoring themselves, which leads to potential abuses of power and reduced transparency and accountability.

Example of Separation of Powers in Business

In 2018, Elon Musk came under increasing criticism for holding both the CEO and chair roles at Tesla, the electric vehicle and clean energy company. He made outlandish claims about the potential of Tesla’s technology, which led to concerns that Musk might be misleading investors.

As Tesla struggled to contain cost and ramp up production of its Model 3 sedans, activist investors asked the board to consider a motion to fire Musk from his chair of the board position and replace board members who lack independence from chair and CEO Elon Musk.

What Is the Separation of Powers in Simple Terms?

In simple terms, separation of powers is the division of government into distinct branches that act independently from one another. This structure enables each branch to perform a clear role, while preventing power from concentrating within any single branch.

How Does the Principle of Separation of Powers Limit Congress?

The principle of separation of powers clearly delineates the legislative branch's responsibilities. For instance, Congress can and does pass legislation, declare war, regulate commerce, and control spending.

But the principle of separation of powers also enables other branches to limit Congress. The Supreme Court, for instance, can strike down laws that are unconstitutional; the executive branch can veto passed bills. (Note that vetos can be overridden with enough legislative support.)

Is Congress More Powerful Than the President?

Under the doctrine of separation of powers, no single branch of government is more powerful than the other. This means that all three branches—legislative, executive, and judicial—are balanced against one another.

The Bottom Line

Separation of powers refers to the division of responsibilities, authorities, and powers among groups or arms of an institution. It's commonly used in a political context to describe the functions of various government branches. However, the term is also used in business to refer to instances where different positions have distinct areas of oversight and decision-making.