Squad bonues are applied to all pilots downstream of the booster that are undocked and in system, so long as you are undocked.
If you have a fleet of two people, if one is in the squad commander position and another is a squad member, both will recieve boosts provided by the squad commander.
If you have a fleet of three, with one person in the wing commander position, and one in the squad commander position, the wing commander will give his boosts to himself, the SC and the normal member, the SC will give boosts to himself and the squad member.
It's useful therefore to have the better skilled pilots in the higher fleet positions.
If you have a squad of jamming ships and a squad of armor tanking battleships it's pointless having the person with armor skills boosting the jammers, and vice versa.
Note: You also need the relevant fleet skill for the size of fleet and the position yo are in (leadership 1 minimum, 5 for a full squad / wing command 1 minimum, 5 for a full wind / fleet command 1 minimum, 5 for a full fleet).