Well, the negative talent which lowers your own side's morale seems to apply multiple times for some reason (or carry over, or some damn thing) so it is not uncommon to start fights panicked, despite a combat rating of 700 vs. 19.
The whole morale system really needs to be either scrubbed or overhauled.
Morale generally only changes by 1 pt up or down per turn. And no battle should last 50 turns.
Moreover, how the hell is it that a side with, say, 5 units for a collective combat rating of 200 maintains that combat rating for morale purposes when it is down to only one unit?
There many things which should affect morale in short run and (comparatively) long run - losses, injuries, overall win-rate, overall flee-rate (although the ai rarely flees), presence of chanelers, presence of long range attackers, Presence of sovereigns and heirs, and starting combat rating comparison