Considering the relevance of leadership to sustainable business development (Hind et al., 2009; Kurucz et al., 2017; Pham and King, 2019), in this paper, we examine the relationship between leadership and organizational performance. More precisely the focus is on ethical leadership which has been defined as “the demonstration of normatively appropriate conduct through personal actions and interpersonal relationships, and the promotion of such conduct to followers through two-way communication, reinforcement, and decision-making” (Brown et al., 2005, p. 120). Ethical leadership has found to be relevant in situations of change, as followers appear more satisfied with ethical leaders, which in turn motivates them to perform better, engage in more organizational citizenship behaviours, and also enjoy higher job satisfaction (Sharif and Scandura, 2014). A recent study by Ali et al. (2022) has also shown the positive relationship between ethical leadership and organizational learning. At the same time, empirical research on the impact of ethical leadership on organizational performance, however, is still limited (Dey et al., 2022). Acknowledging the role of knowledge for sustainable business development (Abbas and Sağsan, 2019; Durst and Zieba, 2020), we argue in this paper that ethical leaders will emphasis and promote continued knowledge creation and knowledge networks to contribute to the firms’ organizational performance (Rhee et al., 2022; Li et al., 2009) and thus their sustainable development. The remainder of this paper is structured as follows. We first briefly address the literature background of this paper. We then explain the methodology of the research. This is followed by the presentation and discussion of the results before we terminate the paper with a conclusion.