Morale is a unit stat which reflects a unit's willingness to stay in combat in the face of adversity. Various things affect morale.

These effects are valid for commanders and units:

• The fire bless effect Superior Morale adds one moral per point spent.
• Being blessed gives all non-independents +1 morale.
• Sermon of Courage or Fanaticism
• Experience stars.
• Being exposed to Fear aura or spells with fear effects temporarily lowers morale. This seems to recover by 3 approximately every 5000 ticks. No single or combination of fear effects may lower morale by more than 5, however.
• Battle fright lowers morale by 5.
• Blood Rain lowers the morale of all units on the battlefield by 4.
• Dark Skies lowers morale of enemies in the caster's dominion by 1 per point of the caster's dominion in the province.
• Being in friendly dominion increases morale by 1. Conversely, being in hostile dominion lowers morale by 1.
• Being in the home province gives a morale bonus of 1.

In addition to the general modifiers, several magic items will boost a commander's morale.

• For 5 gems: Dragon Helmet (+5), Fire Plate (+2), and Ring of the Warrior (+2).

• For 10 gems: Bear Claw Talisman (+2), Green Dragon Scale Mail (+4), Red Dragon Scale Mail (+4), Blue Dragon Scale Mail (+4), Fire Brand (+2), and The Black Heart (+2).

• The Shroud of the Battle Saint will Bless a commander even if not sacred, which adds at least +1 morale.

• A handful of artifacts also boost their wearer's morale.

• The Slave Collar (+20) provides a huge morale bonus … at the cost of being a cursed item that applies the Feeblemind affliction.

• Some items, such as the Berserker Pelt or Lychantropos' Amulet will make a commander berserk at the start of a battle, while the Flesh Eater and Hell Sword give the Berserker trait, causing the commander to go berserk when they first take damage.

In addition to the general modifiers, units are affected by:

• Flat modifiers displayed in the army setup menu. These are based on the leading commander's leadership value and number of squads, as well as mixing undead, demons or living creatures.
• All units under the command of an inspirational leader.
• Animals under the command of a beastmaster commander.
• Slaves under the command of an taskmaster leader.
• Being in a squad with any undisciplined units lowers morale by 1. Note that all undisciplined units get this penalty, it merely extends to any disciplined units they share a squad with.
• Being in sparse line or skirmish formations without the skirmisher trait lowers morale by 1.
• Starvation lowers morale by 4.

Every round of battle, the game checks for units which must make a morale check. This affects units that have¹⁾:

• Suffered heavy losses since its last morale check, and overall casualties are at 20%. "Heavy losses" is defined as one "wound" per two squad members. A "wound" in this instance is at least one or more hitpoints of damage that lowers a unit to below 80% of its maximum hitpoints.
• The squad less than five units in it, and has taken damage this round.
• The unit has been subjected to a spell or effect causing fear, such as the spell Terrify or the effect of a Fear aura.
• The entire army has taken 50% or more of its starting health in casualties. If there was only one creature and its retinue, the retinue is not considered for this.

Practically, taking a morale check makes a roll for whole squad as follows:

• Morale roll: (Squads average morale + squad survivor bonus²⁾) + DRN
• Fear roll: 14³⁾ + DRN

The squad survivor bonus is a value of 0-5 that reflects the number of units in the squad that have been killed. If the fear roll exceeds (but not ties) the morale roll, the squad or commander routs.

Furthermore, if an army has lost 75% of its starting health, it will rout automatically.

• Morale 50 units are mindless and will not retreat for any reason, although they can fall apart when left without proper leadership.
• Units that have gone berserk have 99 morale and will never rout for any reason, as long as they are still berserking.
• Immortal units will never retreat due to army HP loss.
• Morale 30 units, such as pretenders and prophets, will never retreat when defending a a stormed fort.
• Morale 30 cannot be boosted any higher.