You can assign a character as a squad commander, but without the corresponding skill, they won't add any bonuses, except for their own. In this case, their health equals one health point (+evasion*3), while the damage depends on the weapon's damage after modifiers + accuracy, and morale depends on will checks*10. Only magic can be used as skills.
Added after 32 seconds
Oh, almost forgot: a character with the skill can command any number of squads.
Where do we end up when we save the world?