The board will be chosen from qualified and vetted candidates "outside of our normal channels," including through a recommendation portal that will let anyone suggest candidates. There will also be an in-between trust that oversees pay and other day-to-day operations. You'll see at least 11 members (Facebook wants 40) with each serving a maximum of three terms of three years apiece. They'll be chosen on a range of criteria that includes not just relevant experience, but open-mindedness and impartiality. It wants people from a wide range of cultural, political and religious backgrounds.
The board will have a specific process for handling cases. A rotating case selection committee will choose cases to recommend, with at least one of them from the region where the complaint came from. The board will choose the cases themselves, but general staff will choose the panel and case manager. It'll be up to the board and its staff to determine if more research is needed. Facebook will just be there to supply information when requested. Draft decisions from the panel will be circulated to the whole board, which can call for a fresh review if a majority objects to the outcome.
All decisions will go into a database that will serve as precedent for future decisions, much like traditional court systems.
The oversight board won't hear cases until the first half of 2020, although you should hear about its first members before 2019 is over.
If all goes according to plan, the board should help Facebook settle disputes over controversial decisions in a more educated and objective fashion. As TechCrunch mentioned, though, this could also help Facebook's leadership wash its hands of responsibility if a decision proves unpopular or leads to regulatory trouble -- don't blame us, it's the board's fault. Facebook can also decide just how broadly to apply the precedents set by case decisions, so the outcome may not always sync with expectations. Even so, it's a start that could help it address the many, many disputes that have come up over the years.