Source: Warhammer Fantasy: 7th Edition

General's Leadership
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All friendly units within 12" of the General model always use the General's Leadership value instead of their own when making any Leadership-based test unless their own Leadership is higher, of course). This normally means that a unit near the General uses his superior Leadership when testing for Break tests in close combat, when attempting to rally, for Psychology tests such as Fear and Panic, and for any other Leadership-based test. This rule ceases to apply while the General is fleeing, so it is normally a good idea to start rallying your fleeing units beginning with the General, so that the other units attempting to rally can benefit from his Leadership (assuming he rallies, that is!).

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