Quo Vadis, Representative Assembly? – Substitute for direct member participation or democratic façade?

The democratic participation of cooperative members is fundamentally based upon the principle of "one member, one vote". While a General Assembly directly adheres to this principle, venue capacity and logistical constraints historically limited large-scale deliberation. To address this, the German Cooperative Societies Act (Genossenschaftsgesetz) allows cooperatives with more than 1,500 members to replace the General Assembly with a Representative Assembly. Functioning as a representative democracy, this assembly serves as a compromise between direct participation and the indirect expression of member will through elected agents. However, Representative Assemblies dilute direct member control, creating a two-tier structure that can foster member apathy and disengagement. They may also produce random majorities leading to questionable governance decisions and exacerbate agency problems by adding a fourth governing body to the three already existing from the separation of powers: the Management Board (Vorstand), Supervisory Board (Aufsichtsrat), and General Assembly. Technological advances and the widespread adoption of digital meeting formats have undermined the original justification for these assemblies. This paper argues that reducing the role of Representative Assemblies and adopting virtual General Assemblies can strengthen direct member control and revitalize cooperative founding principles. To this end, the historical development of Representative Assemblies and their inherent agency problems are examined alongside opportunities to supplement or replace them with digital formats. The paper concludes that, given highly diluted representation ratios, low voter turnout, and the proven feasibility of virtual formats, the Representative Assembly functions less as a substitute for participation than as an institutional façade. Legal reform should therefore enable cooperatives to reconsider its use.