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AbstractRecent advancements in leadership research emphasise the influential role of ethical leadership in shaping positive employee behaviour. However, there remains unclear the precise impact of ethical leadership on organisational performance and its interaction with knowledge creation and knowledge networks. Drawing on both the knowledge‐based view and the ethical leadership literature, this study asserts a positive influence of ethical leadership on both organisational performance and knowledge creation. Furthermore, we propose that knowledge creation positively impacts knowledge networks, which, in turn, exert a positive influence on organisational performance. To validate these propositions, we employ structural equation modelling on a dataset comprising 205 Turkish firms. Our study contributes to the (ethical) leadership literature as one of the initial attempts to examine the relationship between ethical leadership and organisational performance while considering the roles of knowledge creation and knowledge networks.