Aurelius,

Party leaders are chosen by a majority ballot at a convention. Delegates to the convention are exclusively party members. Hence "Party leaders are chosen by party members".
The same is true of the American experience, only they also add tiresome and expensive "primaries" before holding a national convention.
Prime Ministers are traditionally the party leader, and in Canada, are asked by the Governor General to form a government. Traditionally, the Prime Minister is elected to the House of Commons, although there have been instances where the Leader ofthe Opposition has not held an elected seat - he/she mustthen sit in the Gallery and observe until elected.