Source: Warhammer Fantasy: 4th Edition

Flank and Rear Attacks
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Being attacked from an area you cannot see and thought was safe is a frightening thing for even the bravest of troops. With his field of vision narrowed by his position in the ranks, the average soldier has only a limited knowledge of what is going on in the battlefield. If the enemy has somehow got round behind him the battle may be lost. Confusion, doubt and terror will be sown in his mind. If he is in hand-to-hand combat already he may panic and flee, thinking all is lost and the enemy is at his unguarded back.

To represent this, troops who are attacked in the flank or rear while already fighting other enemy must take a panic test to see if their nerve breaks. This test is taken as soon as it has been established that the chargers are in range, but before moving any troops. Panic tests and other psychological tests are described fully in the section on Psychology. Even if troops do not break and flee as a result of a panic test, their ability to fight will be impaired if they are fighting enemy to their flanks or rear. This is represented by a special combat bonus which is discussed in the Hand-to-hand Combat section.