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Laffoon's successor, A. B. "Happy" Chandler, called a special legislative session in 1936 seeking passage of another reorganization act. This act abolished several commissions and organized those remaining into ten statutory departments: Finance, Revenue, Highways, Health, Welfare, Industrial Relations, Business Regulation, Conservation, Libraries and Archives, and Mines and Minerals. The Act also created the Executive Cabinet, consisting of the constitutional officers and the heads of each of the ten statutory departments. The efficiencies created by Chandler's reorganization allowed him to pay off more than three-quarters of the state's $28.5 million debt. Besides effecting the reorganization of the executive branch, the Reorganization Act of 1936 also explicitly empowered the governor to appoint executive department heads and establish, combine, or divide departments as necessary. Later statutes gave the governor the power to appoint advisory committees on reorganization, appoint deputy heads of divisions, transfer employees and change their responsibilities within the executive branch, and establish general rules of conduct for executive branch members. In the 35 years between the time of Chandler's reorganization and the election of Wendell H. Ford as governor in 1971, the executive branch had again become unwieldy. 60 departments and 210 boards reported directly to the governor by 1972, and duplication of services between departments had created inefficiencies. On January 1, 1973, a plan that Ford had issued in late 1972 took effect, consolidating the departments reporting to him into six program cabinets: Consumer Protection and Regulation, Development, Education and the Arts, Human Resources, Safety and Justice, and Transportation. Ford continued merging departments and reorganizing the executive branch throughout 1973 to the extent that, by the end of the year, there were only three program cabinets (Development, Education and the Arts, and Consumer Protection and Regulation) and four additional departments (Human Resources, Justice, Natural Resources and Environmental Protection, and Transportation). By 2002, the executive branch had again grown to fourteen cabinets, but had no additional departments. Shortly after his election in 2003, Governor Ernie Fletcher undertook the last major reorganization of the executive branch to date, reducing the number of cabinets to nine—Justice and Public Safety, Education and Workforce Development, Environmental and Public Protection, Transportation, Economic Development, Health and Family Services, Finance and Administration, Tourism, Arts and Heritage, and Personnel. Because the governor controls so many appointments to commissions—approximately 2,000 according to a 1992 estimate—the office has been historically considered one of the most powerful state executive positions in the United States. Additionally, the governor is given wide discretion in awarding state contracts, further augmenting his influence. In the second half of the 20th century, attempts were made to curb the use of the governor's appointment power for political patronage. During his second term in office, Happy Chandler issued an executive order creating a merit system that forbade the hiring or firing of state employees for political reasons; his successor, Bert T. Combs, pushed a new merit system through the legislature, protecting it from abolition by executive order. Despite the presence of the merit system, many governors have been criticized for abusing their appointment power. In 2005, Ernie Fletcher and several members of his administration were indicted for violating the merit system in their hiring practices; the charges were later dropped as part of an agreement with the prosecutor, Attorney General Greg Stumbo.

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