The player's maximum party size is calculated differently than NPCs. Party size is affected by your renowncharismaand leadership skill. Party size represents how many troops you can take with you. Also, fighting more than 1 or 2 times a day will lower morale. Morale of nation-based troops is also greatly negatively affected if you are waging a war against their home nation.
You can lose morale from starvation, losing battles, and failing quests.
You can increase your morale by winning battles or tournaments, having a variety of foodcompleting quests, razing villages and raising your leadership skill. Morale influences your moving speed and when it becomes low your troops will start deserting. It is important to level up your Persuasion so you can handle inner party disputes, as not all heroes will like each other. There are sixteen heroes in the game you can hire from taverns. Heroes are important because they cannot die in battle they just get wounded. Note the weekly cost, morale display, party composition, prisoners and hero abilities.