The Marshal is in command of a part of the realm's army. Each Army is entitled to have a Marshal designated by the sponsor. Knights are dispatched by their liege to serve in whatever army pleases their lord at the time, to serve under the command of the marshal.
The Marshal has the option to take command of his army during battle. Depending on his leadership skills, this can be a good thing, or devastating in combat. The Marshal should be chosen carefully. As the Marshal of the army of your duchy, you regularly meet the command staff in the planning tent, where you can review and change your settings for the next battles. Note that these settings will only go into effect if you take command in the battle, which depends on your Leadership skill, forces present and a few other factors, including a bit of luck.
A Marshal has the ability to assess his army, by viewing their current status. This provides information such as how ready they are, their combat strength, their unit size, and where they are. Readiness is a rough estimate of how much more combat the unit can take before suffering serious consequences. It takes into account morale, Equipment Damage, cohesion and how many of the men are wounded.
A Marshal also has the ability to specify command staff settings. This allows him to specify line settings for all units on their side of a battle. This includes all nobles from your realm present at the battle, as well as nobles from allied realms. Offensive settings include "Infantry Charge", "Cavalry Charge", "Archer Opening", "Waves", "Soften and Charge", or leave it unspecified. Defensive settings include "Fortification Deploy", "Infantry Wall Deploy", or leave it unspecified. When the Marshal's Leadership increases more options become available, such as "Mixed Lines" and "Delay and Wound". There are still more for further skilled marshals...
Marshals can also issue a standing order. A standing order is simply a short text that all troop leaders in their army will see as the first message in their list whenever they read their messages. In other words: it saves the trouble of repeating the same order again and again.