This paper shares findings from case study research into how school principals respond to ethical dilemmas. Preliminary research instigated a criteriological inquiry into the nature of schools as systems and findings of that inquiry conclude that schools are complex adaptive social systems rather than the open complicated systems they are unconsciously assumed to be in much of the school leadership literature and professional support. This misrepresentation and misunderstanding of the nature of schools as systems have significant consequences for the effective practice of school leadership and these are particularly poignant in responding to ethical dilemmas. This paper offers an overview of the argument that schools are complex adaptive social systems and identification of leadership work that is compatible and incompatible with that mental model of schools as a system. A finding from the case studies is that the principals act in ways consistent with the nature complexity, without explicit awareness of the mental schemas they are applying. Furthermore, their real life approaches are not reflected in much of the professional learning support and leadership theory currently available to them. The paper identifies principal practices from the case studies that are compatible with the real nature of schools as systems and considers the potential of those features as a framework for critique of policy, professional support and school leadership research and literature. It also proposes that the ways principals understand and respond to real ethical dilemmas challenge the ways schools continue to be defined.