Source: Warhammer Fantasy: 6th Edition

General's Leadership
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Any unit within 12" of the General model may use the General's Leadership value instead of its own when making a Leadership-based test. This means that a unit near the General can use 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 if the General is fleeing.

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