So you could have
-1 Morale for being in base to base contact with a fear causing enemy.
-2 Morale for being within 6" of a terror causing enemy (stacks with Fear for -3 if in b2b contact).
-1 Morale for being engaged in the flank
-2 Morale for being engaged in the rear
-1 Morale for each enemy unit within 6"
+1 Morale for each friendly unit within 6"
+1 Morale for being in a combat with more friendly units than enemy units (ganging up)
+1 Morale for charging that turn
+1 Morale for each inspiring presence influencing this unit
+5 Morale for having more complete ranks than any single enemy unit in this combat (replaces steadfast).
-1 Morale for each wound taken this turn unless the unit is Stubborn
-2 Morale for less than 50% of starting size (should be on lists)
ITP units ignore all modifiers (including positives) and unbreakable units have no change - they'd stay unbreakable. I've always thought that ITP should be better than Stubborn but you can switch this up if this isn't considered fair or stuff.
At the end of each players turn, every unit (except unbreakable units) on the table takes a morale test. To do this they take their base Morale subtract the number of wounds taken and apply any further modifiers and add their current moral to their LD (so -4 morale gives -4 to leadership).
BSB can still provide a reroll or grant inspiring preasance (or both).
I think this would add a lot of complexity but would be a much better (and certainty more realistic) mechanic than the current one. Both generals would be able to see where the lines are weakest and gives meaningful tactical options to both sides. Panic tests could stay as a one off test in specific circumstances.
Never argue with Idiots. They drag you down to their level and then beat you with experience.