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The increasing reliance on culturally diverse teams, particularly in digitally connected and globally distributed workplaces, has intensified scholarly and practical interest in the leadership capabilities required to transform diversity into a source of performance advantage. Despite strong theoretical arguments supporting the benefits of diversity, empirical findings remain inconsistent, reflecting what is often described as the diversity-performance paradox. This narrative review synthesizes cross-disciplinary research on cultural intelligence (CQ) and leadership effectiveness to examine how leaders facilitate communication and multilevel performance outcomes in multicultural teams operating in both co-located and technology-mediated environments. Drawing on literature from leadership studies, cross-cultural psychology, and team communication research, the review positions cultural intelligence as a central leadership capability encompassing metacognitive, cognitive, motivational, and behavioral dimensions. The synthesis indicates that the influence of leader CQ on performance is largely indirect, operating through key communication mechanisms including psychological safety, adaptive communication, conflict regulation, and trust. These processes shape outcomes at multiple levels, influencing individual engagement, team coordination and innovation, and broader organizational performance. The review further identifies contextual moderators such as cultural distance, power distance orientation, and interaction modality, including virtual collaboration platforms and digitally mediated communication. By integrating previously fragmented research streams, the paper develops a communication-centered, multilevel conceptual framework explaining how culturally intelligent leadership enables diverse teams to translate cultural differences into collaborative and performance advantages. The framework provides theoretical integration and practical guidance for leadership development in increasingly multicultural, digitally mediated, and globally distributed work environments.