Master Zhuang is the second most influential writer in Daoism and the book Zhuangzi was named after him. Chapter Seven is How to Govern and describes what leadership should look like.
Manipulation
Some leaders try to convince others to join them by being kind, making friends, and building relationships. The sage makes no effort to convince others. They simply exist in the moment and accept life as it is.
“The Emperor Shun was not equal to Tai Huang. Shun was all for charity in his zeal for mankind; but although he succeeded in government, he himself never rose above the level of artificiality. Now Tai Huang was peaceful when asleep and inactive when awake. At one time he would think himself a horse; at another, an ox. His wisdom was substantial and above suspicion. His virtue was genuine indeed. And yet he never sank to the level of artificiality.”
Rules

Most leaders create rules and regulations for their followers to ensure proper behavior. The sage resists making rules, but ensures they are correct before they act. Even then, they still only act in a limited way to create space for others to live.
“The government of the truly wise man has no concern with externals. He first perfects himself, and then by virtue thereof he is enabled to accomplish what he wants.”
Freedom
Many leaders lord it over others. The sage goes along with life and doesn’t allow their personal views to affect others. They influence others but don’t let people depend on them. They give others freedom to live their life.
“Resolve your mental energy into abstraction, your physical energy into inaction. Allow yourself to fall in with the natural order of phenomena, without admitting the element of self, — and the empire will be governed.”
Do Nothing At All

The sage does not try to move quickly or gain strength. They do not strive or study. It seems as if they do nothing at all, yet everything gets accomplished. They are not arrogant. They do not seek fame, plan, scheme, or seek out wisdom. They are content with what they have.
“’The goodness of a wise ruler,’ answered Lao Dan, ‘covers the whole empire, yet he himself seems to know it not. It influences all creation, yet none is conscious thereof. It appears under countless forms, bringing joy to all things. It is based upon the baseless, and travels through the realms of Nowhere.’”
Emptiness

The sage is connected to the earth. They are calm, still, and reflective. They are of this world yet aware of all existence. They adapt to the situation and seek balance. They are empty and do not get entangled. They do not try to understand the external world but attempt to become empty inwardly.
“I showed myself to him just now as the earth shows us its outward form, motionless and still, while production is all the time going on. I merely prevented him from seeing my pent-up energy within…I showed myself to him just now as heaven shows itself in all its dispassionate grandeur, letting a little energy run out of my heels. I showed myself to him just now in a state of harmonious equilibrium. Where the whale disports itself, — is the abyss…I showed myself to him just now, said Huzi, as Dao appeared before time was. I was to him as a great blank, existing of itself.”
Summary
The sage does not try to convince others to their cause. They exist in the moment. They do not create rules for others to follow but only take limited action. They positively influence others but never manipulate them. The give others the space to be themselves. The sage does not strive yet accomplishes everything that is needed. The sage works towards emptiness. They are calm, reflective, and do not get entangled. They are a mirror reflecting things around them.
“By Inaction, fame comes as the spirits of the dead come to the boy who impersonates the corpse. By Inaction, one can become the centre of thought, the focus of responsibility, the arbiter of wisdom. Full allowance must be made for others, while remaining unmoved oneself. There must be a thorough compliance with divine principles, without any manifestation thereof. All of which may be summed up in the one word passivity. For the perfect man employs his mind as a mirror. It grasps nothing: it refuses nothing. It receives, but does not keep. And thus he can triumph over matter, without injury to himself.”
Resource
Chuang Tzu, Mystic, Moralist and Social Reformer, Herbert A. Giles, translator. Bernard Quaritch 1889. Classic public domain translation.

