I'm glad you asked ME this question as I am the most qualified on Hubpages or any other pages, to answer it seeing as how I have been a Naval Captain for many years in Neverland, chasing down Captain Hook and other very serious endeavors for the Canadian Government, much too 'hush-hush' to talk about here, but rest assured, so long as I am around, the Naval Fleet of Neverland and Canada are safe as houses and twice as expensive.
So your question " has many levels," as everyone is fond of spouting these days, and I know them all.
First, it depends on the type of battle. A flagship can boost morale, lower enemy chutzpa, and all that, depending on it's flag. The Pirate Flag is best for it scares the enemy ship to bits and even if you are not a Pirate (and I hope you are not!) the trick works like a charm to send the blighters paddling in the opposite direction.
Second point. If the battle is one of the supernatural variety, such I encounter now and again when I sail through the Ottawa Canal, where mischief if often afoot with demons and angels going at it tooth and nail (and demons do have both in abundance) then the flagship is best left at the rear, where, in an act of desperation it can be trundled forth and it's flag emblazoned with the Mighty Maple Leaf, it will in almost all cases, send the Demons packing. (they are allergic to maple leaf trees.)
So there you have the best answer you are likely to receive on this question. I suggest printing it out and mailing it to all your naval-buddies for confirmation.