First: The status of morals in Islam
1) Morality is linked to faith in both its strength and its weakness
Good morals are part of faith. According to Abu Hurairah, he said: Allah's messenger (may Allah bless him and grant him peace) said: (Faith exceeds seventy or exceeds sixty branches, the best of which is saying 'La ilaha illa Allah' (There is no deity except Allah), and the least of which is removing harm [away] from the path, and shyness is a branch of faith)(1). So, shyness is part of faith, as is truthfulness, patience, gratefulness, generosity, modesty and the rest of the praiseworthy morals that Allah has ordained or those ordained by His messenger (may Allah bless him and grant him peace). As a person's faith in Allah increases and his certainty in the hereafter increases, then his grip on the branches of faith, including virtuous morals, becomes stronger. [Conversely,] whenever his faith decreases, then his determination weakens and his morals deteriorate.
2) Completing noble morals
[This is] one of the most important objectives of the message sent [by Allah] with Mohammed (may Allah bless him and grant him peace). According to Abu Hurairah, he said: Allah's messenger (may Allah bless him and grant him peace) said: (Indeed, I was sent to complete good morals)(2), and that is so because good morals require performing the obligations due to Allah Almighty and the obligations due to His slaves. Shyness for example; just as [a person is shy] of people, it is so [that a person is shy] of Allah Almighty, which motivates [the person] to uphold [Allah's] commandments and avoid His prohibitions, as Allah's messenger (may Allah bless him and grant him peace) said: (Be truly shy of Allah), he [the narrator] said: we [the companions] said: Oh messenger of Allah, we are shy, thanks to Allah, [Allah's messenger] said: (Not that, but to be truly shy of Allah is for you to preserve the head and what it became aware of, and the abdomen and what it contains, and for you to remember death and decay, and whoever desires the hereafter abandons life's adornment, and whomever does that is truly shy of Allah)(3). This is so of truthfulness, and honesty… So, whoever has completed [attaining] noble morals than he has completed [attaining] faith. Thus, the [Muslim] scholars said: Morality is the sum of the believers' attributes((4)).
(1) Albukhary: hadeeth #9; Muslim: hadeeth #35 and this pronunciation is his. 'Exceeds': is anywhere from three to nine or anywhere from one to ten. 'Branch': is a denomination or piece of something, and making it part of faith is because a shy person, due to his shyness, stops committing sins even if he has no piety, and so it became like faith that stands between a person and sins (Alnehayah 1/133, 2/477).
(2) Ahmad 2/381 and this pronunciation is his; Alhakim 2/613; Albukhary in Aladab Almufrad #273; see Saheeh Aljame' #2345.
(3) Ahmad 1/387; Altermethy #2460; see Saheeh Aljame' #948.
(4) Ibn Gudamah Almagdesy in Mukhtasar Minhaj Algasedeen pg. 158, with remarks by Shouaib and AbdulGader Alarnaot.