Building on behavioural leadership theory and structuration theory, we present a two-order theory of leadership. It describes four classes of first-order leadership behaviours (task coordination, substantive task contribution, group maintenance and boundary spanning) and defines second-order leadership as behaviour that influences changes in the structure that guides group action. We argue that second-order leadership is enabled by first-order leadership and is therefore action embedded and grounded in processes that define the social identity of the group. We propose that effective virtual teams will exhibit a paradoxical combination of shared, distributed first-order leadership complemented by strong, concentrated, and centralized second-order leadership. We conclude by suggesting future research that might be conducted to test and further elaborate our theory.