The side that loses a combat must take a test to determine whether it stands and fights or breaks from the combat and runs away. This is called a Break test. You need to take a separate Break test for every unit involved in the combat on the losing side.
Depending on which units pass and which fail their test, some may break and flee whilst others stand their ground. Troops that are better led, braver, and more professional are more likely to stand firm, while wild, temperamental troops are far more likely to run for it.
Take the test as follows. Firstly, nominate the unit for which you are testing and then roll 2D6. Add the difference between the winner's combat result score and the loser's. If the total is greater than the unit's Leadership (Ld) value then the unit has broken and will flee.
For example, a unit of Elf Archers is fighting a unit of Goblins. The Goblins inflict 3 wounds on the Elves, and the Elves inflict 4 wounds on the Goblins. However, the Goblin player has four complete ranks in his formation, each rank beyond the first adding +1 to his score, and his troops outnumber the Elves, adding another + 1. This gives him 3+3+1 = 7 points against the Elves' score of 4.
The Elves have therefore lost the combat, even though they have caused more casualties - the vast numbers of Goblins pressing from the back have overwhelmed them. The Elves must therefore take a Break test adding +3 to their dice score, because the difference between the scores is 3. Elves have a good Leadership value (8) but with the extra +3 modifier on the dice, the player will have to roll 5 or less to stand and fight. The player rolls 2D6 and scores 7. The +3 modifier brings his total to 10, which is greater than the unit's Leadership, so the Elves have broken and will flee.