What are the potential ethical and multicultural issues that can occur when a subordinate is promoted and placed in a leadership position?

I think coaching, counseling, feedback, or whatever you want to call it is the first step.  Clear communication from senior leadership on expectations for the newly promoted is crucial.

The more difficult part will be the newly promoted breaking ties with his or her old peers, and stepping into a leadership position.  We have all seen this happen where one person in a circle of friends is suddenly the boss.  It is up to the newly promoted to handle that change, and they may need some guidance and assistance to make the switch.  I always like when newly promoted people are able to PCS or at least change sections and work with new people.  I know I am personally pleased that I will cross into the SNCO realm two months before I PCS and can walk into my new assignment wearing the stripe!