Not a bird scientist or a bird lawyer, but I can tell you that they know which direction to fly because they have a small amount of magnetite in their brains which they can use as a compass. They also appear to use landmarks like rivers, coastlines, and mountain ranges for more refined directions. As far as how they decide who leads, they just take turns. The lead bird will help break the air for the birds behind them making it easier for them to fly. When the lead bird tires, another will simply switch places with it until the cycle repeats and they get where they want to go.