Electronic fetal monitoring (EFM) has the potential to promote fetal health and improve neonatal status at birth; however, EFM as a stand-alone tool is ineffective in avoiding preventable adverse outcomes. It is effective only when used in accordance with published standards and guidelines by professionals skilled in correct interpretation and when appropriate timely intervention is based on that interpretation. Interpretation and intervention are best accomplished as a collaborative perinatal team rather than individual activity. Only in these circumstances can EFM optimally contribute to fetal well-being and subsequent neonatal health. Risk management strategies to decrease potential liability are presented that can be accomplished with careful planning and collaboration among perinatal team members.