Jordan,
I don't think there is any reason that separability would be rendered inoperable by the CWG's proposal. Quite the opposite. We have been very focused on separability, and it is one of the key principles that underpin our entire proposal. We have developed a community-driven separation process for that purpose, culminating in the SCWG.
I think the issue of the ICANN Board's duties, including fiduciary duty, is more nuanced than you imply (or than Jones Day may sometimes appear to imply), and it includes duties relating to the public interest, among other things. We have received advice from Sidley Austin on this broader issue. I don't have it at my fingertips, but it should be available on the CWG wiki pages, where there should be a page with documents, including documents from Sidley.
Given the Board's duties, there did not seem to be any question that the Board could agree to relinquish the IANA operator duties relating to names. I expect this would be further clarified in the Bylaws relating to the SCWG and to separation generally.
Greg