From a Gamefaqs walkthrough
Officers: Certain Characters can be different types of officers. You
can find out which ones a character can be in their status menu.
Basically, Officers enhance military units. Admirals enhance fleets,
Generals enhance troops, and Commanders enhance fighters. Admirals
and Commanders make their units faster and more responsive in
Tactical Mode and Generals make their troops much stronger and more
Basically, except for Generals, I don't notice Officers
boosting your units combat effectiveness that much. Their main
strength lies in their ability to drastically increase the detection
ratings of their units. This can greatly increase your defenses
against enemy covert missions. So, it would be a good idea to post an
officer on your more important planets to protect them.
Even when you have an idle character and just don't have anything for him/her to
do, you can always make them an officer for added defense in your
territory, that way they're not being wasted.