What Are Checks and Balances?

The concept of checks and balances involves dividing power among different bodies or entities to prevent any one of them from having too much power. Implementing checks and balances within organizations can effectively minimize errors and deter improper conduct. This concept is often associated with government, such as in the U.S., where the executive, legislative, and judicial branches serve as a system of checks and balances. In businesses and organizations where one person, like the CEO or a major shareholder, can make decisions that impact operations, the practice of implementing them is crucial. This concept has been around since the days of the Roman Empire.

Basics

There are many ways to prevent mistakes, stop misconduct, and avoid the dangers of having too much power in one place. These procedures, known as checks and balances, safeguard against the concentration of power within a singular individual or department. By explicitly delineating assigned responsibilities and fostering collaboration, checks and balances effectively thwart absolute control over decision-making. Although commonly associated with governance, this term extends its reach to encompass power limitations within the realm of enterprises and other organizational structures.

How Do Checks and Balances Work?

In both the public and private sectors, checks and balances are pivotal in upholding effective governance. The United States government exemplifies this principle through its tripartite system, consisting of the legislative, executive, and judicial branches. Bound by constitutional limitations at the federal and state levels, this structure ensures authorized actions and upholds democratic principles.

Beyond the realm of government, businesses and organizations recognize the significance of checks and balances in mitigating operational risks. While implementation may entail additional costs and reduced efficiency, the benefits are undeniable. By allocating distinct roles and responsibilities to employees, organizations safeguard against potential harm caused by rogue individuals, thus necessitating the involvement of others. These internal controls prove instrumental in identifying internal and external threats, bolstering operational efficiency.

Publicly listed companies in the United States further abide by checks and balances as mandated by the Sarbanes-Oxley Act. Under legal obligation, directors are responsible for establishing robust internal control systems that incorporate checks and balances. This compliance requirement ensures the integrity and transparency of these businesses' operations.

Checks and Balances in the International Arena

Within the framework of the world economy, checks and balances serve as an integral mechanism to maintain stability. The United Nations, comprising six different internal institutions, is at the forefront of this effort. These institutions include the International Court of Justice, the General Assembly, the Economic and Social Council, the Trusteeship Council, the UN Secretariat, and the Security Council.

Each institution assumes unique responsibilities, ranging from upholding international peace to reviewing policies and providing economic, social, and environmental recommendations. Additionally, the presence of an international court ensures impartial adjudication. Crucially, individuals and these bodies maintain deliberate separation of influence. Given the UN's profound global impact on numerous nations, the dispersion of authority across different groups is vital to prevent the concentration of power.

The UN's voting system and veto power policy further bolster checks and balances by enabling individual countries to exercise oversight over the actions of their counterparts. Through this mechanism, potential abuses of power can be mitigated, promoting equitable decision-making and safeguarding the interests of diverse nations across the globe.

Checks and Balances in Action

The U.S. Constitution meticulously incorporates checks and balances to safeguard against the concentration of power within the U.S. government. These checks and balances arise from the separation of powers among the three branches: the legislative, executive, and judicial branches. By design, each branch possesses distinct authorities to prevent any one section from acquiring unchecked dominance.

The practice of checks and balances within the U.S. government unfolds through various mechanisms. Firstly, the legislative branch formulates laws, but the executive branch holds the power of veto, granting the president the ability to oversee the legislative branch. Moreover, the judicial branch, responsible for interpreting laws enacted by the legislative branch, can declare certain laws unconstitutional, rendering them void.

Additionally, while the president holds veto power, the legislative branch can overturn a veto through a two-thirds "supermajority" vote in both houses of Congress. This provision ensures that the president cannot exploit their authority for personal gain. Furthermore, the executive branch can issue executive orders outlining the enforcement of specific laws, yet the judicial branch can invalidate such orders if they violate the Constitution.

The Impact of Executive Orders

Executive orders, a prerogative of the president as the head of the executive branch, are typically implemented in the country's best interest and seldom face constitutional challenges. However, subsequent administrations possess the authority to reverse executive orders. For instance, soon after assuming office in January 2021, President Joe Biden signed Executive Order #13986, titled "Ensuring a Lawful and Accurate Enumeration and Apportionment Pursuant to the Decennial Census." This order effectively reversed policies set by a prior executive order issued by President Donald Trump, which sought to exclude non-citizens from the U.S. Census count.

Conclusion

Checks and balances are a crucial framework for minimizing errors, preventing misconduct, and avoiding excessive concentration of power. They are implemented in various contexts, such as government, business, and international organizations like the United Nations. By delineating roles, promoting collaboration, and incorporating oversight mechanisms, checks and balances enhance decision-making and operational efficiency. Examples include the separation of powers in the U.S. government, the use of veto power, judicial review, and executive orders. These principles uphold integrity, transparency, and accountability, ensuring equitable decision-making and global stability.