The problem I see with the governors system is that it tries to gather 2 opposite things: governing a city and being a hero (this is: questing and leading armies).
What you suggest, could try to merge both things, but I find it: a bit messy (having to control wich cities have governors, then changing to other cities...), and not immersive: how can a city be governed if the governor is out?
I understand that being a governor implies that the hero will renounce to questing and fighting, but governing a city should provide a way to develop him, because he is doing his duty, and he is learning and improving in how to manage a city. For example:
- Each building that reduce unrest, or at least the town hall, should provide a fix amount of XP to a governor, but not to a non-governor hero.
- Pacifying a conquered city should too.
- If we had the options "turn production to gildar or to research" in the cities, that could be a way to slightly increase the XP of the governor.
It is not much, but with these things, at least the feeling of wasting a hero would be lowered.
BTW, I'll add that the Merchant and Loremaster traits are underpowered. Instead of a fix amount (+1, +2...) give them +10% (+20%, +30%) bonus to research or gildar when in a city, and make a bonus production trait. Tht will really encourage to have governor heroes.