This article introduces international co-principal and shared leadership initiatives that have aimed to develop more democratic organizational structures and practices. It focuses on a case study of a New Zealand primary school co-principalship initiated during the 1990s rise of new right managerialism and describes the impact on this initiative of some inter-group misunderstandings and struggles over power. A discourse analysis shows how these struggles were being played out within the normalising power of state discourse and regulatory practices that marginalized the two 'special character' educational strands in the school. The discussions endorse Fraser's (1997) argument that both cultural re-valuation and political/ economic re-distribution are needed for building a democratic school community. The article concludes that this requires a different set of considerations and practices to those promoted within a market managerial approach to school leadership.