1) Set up in-house rules like the usage time, photos are uploaded with prior permission, become a friend of your child on Facebook.
2) As a parent resist the temptation to make public comments on your child’s pages; that might embarrass them, which can create an unwanted communication barrier between you and your child. Some children might be willing to have their parents friend them but are reluctant to have their parents’ names show up on their friends list. You can solve this by creating an account under a different name, although it is a violation of Facebook’s terms of service not to use your real name. Another approach you can take is to require that you know your child’s password (But your teen will not be happy with this approach).
3) Privacy settings need to be set properly. Facebook keeps on changing their functions, settings regularly, so be updated with any news on privacy settings and other functions on Facebook. The profiles can be set in such manner that no information is shown to people who are not friends on Facebook.
4) Check the tagging setting, select the option where the tagging is approved only by prior permission.
5) Make sure your child does not accept friend request from strangers and also don’t send any request to unknown people. Tell them how accepting request of unknown people can harm them.
6) The email account which is used to create the Facebook profile should be regularly checked. Setting should be such that all the activities happening on Facebook should be notified to you by the email.
7) Tell your child about general tips and guidelines which I have already posted on my blog.
8) Tell them that they should not post any offensive content on Facebook and also shouldn’t join any “I hate” group. Tell them how it can harm them and strict action can be taken against him by you and also by people who belong to government, Facebook or any person who is hurted by that content.
Also check out my post on “Things to be kept in mind when your kid wants to use social media”, here - http://socialmediawiseblog.wordpress.com/things-to-be-kept-in-mind-when-your-kid-wants-to-use-social-media/