The dialogue option is now called: "I wish to assign a governor for a center.''
It is only available if your minister is either a lady or a companion, the default minist (Septimus Homunculus) doesnt have that option. In general, I recommend to use your wife as minister, if you have one, or one of your companions
And as emperor, there is this event where you can adopt a girl, if you adopt her, you should be able to make your new daughter minister too (that should be possible due to diplomacy)

Thank you! Btw great mode ;) hope we'll get the same in Bannerlord some day ;) - funny easter egg after killing this merchant in Rome - I've take whole inventory of these caps - expected they are more worthy xd