Firstly, never let any general end his turn in a town/city that doesn't have a finished Grain Exchange. I always get the Grain Exchange built first before anything just so that I can get a general to govern there safely. That way they avoid the Bad Trader traits (10% trade penalty for each level).
Next get your governor to build lots of good buildings; that is have a general stay in the city for the last turn of completion of the building. Never have a governor complete a building with Normal or Low taxes. Best to move him outside if you can't manage not to do that without red faced people.
Try for the 'Good With Taxes' traits each time you complete a building. Make sure you set the tax level to Very High and try and get the population happiness to blue (75% or 80% - no more, no less) by moving garrisonned units in and out until the people turn blue in the face. This is sometimes impossible so don't worry if you can't do it every time: it's an odd set of circumstances to acheive but the rewards are worth trying.
After 'Good With Taxes' there's 'Thorough Taxman' and then 'Cruelly Exacting Taxman'. Each level gives a 10% boost to tax income.
You should aim for each general to build at least one church and one town hall. That way they'll have a chivalry point for 'Fair In Rule' and another for 'Sense of Justice'. Get them to go on a crusade for at least 2 chivalry plus chivalrous retinue, and any settlement you take with a general, choose to Occupy Settlement - roughly 1 chivalry each time.
Your governors will get 5+ chivalry in no time, and for each point there's a population increase boost of 0.5%. A 10 chivalry governor boosts the city's growth rate by 5%!
Lastly, always move your governors at least one square out and then back into the settlement before you end the turn. That way they avoid the majority of bad traits from brothels and inns and the like.
Job's a good 'un, and don't forget to look at
Kobavelli's The Prince : a guide to breeding the perfect statesman
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