Microsoft Teams Governance and Configuration Best Practices

Microsoft Teams has become a cornerstone of modern workplace collaboration, empowering organizations to connect, communicate and thrive in a hybrid work environment. But unlocking its full potential requires a well-thought-out approach to governance and configuration.

Implementing Microsoft Teams governance and being intentional about how it’s configured makes certain that your environment is not only secure and compliant but also structured to support productivity and growth. By getting the configuration correct, you create a system that empowers users, minimizes risk, and adapts seamlessly to your organization’s needs.

Remember: Successfully setting up Microsoft Teams enables employees to communicate and collaborate across networks and applications through one integrated hub instead of constantly “switching lanes” between multiple applications such as email, SharePoint, and web browsers.

Understand the Microsoft Teams Universe

Before discussing Microsoft Teams configuration and governance best practices, let’s clarify the different components of Microsoft Teams.

• Teams: In Microsoft Teams, a “Team” is a collaborative workspace designed to bring people, conversations, files, and tools together in one place. Each Team is built around a specific purpose — whether it’s a department, project or group initiative — and includes channels to organize discussions and content by topic. M365 Groups backs Teams and integrates seamlessly with other Microsoft tools like SharePoint and OneNote, ensuring that all members have access to shared resources and real-time updates.
• M365 Groups: Each Team creates an M365 Group on the back end that associates the Team members together in the Azure Active Directory. Team member identities are automatically applied in Exchange (in the form of username and group email identities) and other apps across the platform.
• Entra ID: Entra ID is Microsoft’s cloud-based identity and access management service. It is the backbone for user authentication and authorization across Microsoft 365, Teams, and other integrated applications. Entra ID ensures the right users have secure access to the right resources, supports single sign-on (SSO) for seamless logins, and enforces security measures like multifactor authentication (MFA) to protect organizational data.
• OneDrive for Business and SharePoint Online: All documents shared within a Team (such as Word docs, Excel spreadsheets, PowerPoint decks, and so on) sync with copies stored either in Microsoft’s OneDrive for Business cloud storage (for files shared in individual chats) or in a dedicated SharePoint site (for team-level shared files). This gives every team member collaborative access to the most up-to-date versions of documents shared across the team.
• Exchange Online Shared Mailbox and Calendar: When communication occurs in Teams, the information is stored in Exchange Online in a few different ways:
  • • Channels organize Teams conversations and files around a specific category or topic. Channel messages are stored in group mailboxes, and chat messages are stored in a user mailbox. Note: The new Private Channels feature — which enables private, “sidebar” conversations within teams — behaves differently than Teams’ original Channels.
    • Chat enables ad hoc conversations on topics, documents and meetings. Users can access chat histories through the compliance portal, and Exchange Online holds eDiscovery.
    • OneNote Notebook provides a place to create, store, and access notes and annotations directly through the Teams environment on the corresponding SharePoint site.

These core components allow Teams to act as a functional central hub for communication and collaboration on documents and other shared resources.

Now that you’re familiar with some of the nuts and bolts, let’s dive into the details of a Microsoft Teams configuration.

How to Configure Microsoft Teams

The best approach is to first define your organization’s rules of governance (which we’ll get into below) and then configure Microsoft Teams through the powerful M365 Security and Compliance Center. The best practices for configuration are also the best practices for Microsoft Teams governance. If you have clearly defined governance policies, configuration becomes much easier because there’s a ruleset to follow.

Areas where your organization will need to make global governance decisions concerning Teams include:

• Authentication and Encryption: Microsoft Teams enforces multifactor authentication, single sign-on through Entra admin portal, and encryption of data in transit and at rest across teams and organizations.

• Teams Data Security and Security Classifications: Microsoft Teams’ security-rich M365 platform features built-in data-security capabilities that enable administrators to classify security settings and safeguard data from unauthorized access using security classification labels.

• Compliance Boundaries/Information Barriers: M365 administrators can limit certain individuals or groups of individuals in organizations that are dispersed among several localities or have special compliance needs.

• Global Records Retention Policy: The M365 Security and Compliance Center features tools for customizing records management and retention policies for Microsoft Teams.

• Auditing and Reporting: The M365 Security and Compliance Center also allows the audit log feature to make user activity data available for administrator use and investigations.

• E-Discovery and Legal Hold for Chats and Files: Teams manages Legal Holds in the M365 Security and Compliance Center and generally applies these with the context of an eDiscovery case. Teams maintains all data associated with a user or a team under a Legal Hold in an eDiscovery search while the hold is in effect.

Microsoft Teams Governance Best Practices

Now that you know the areas where you’ll need to apply governance, let’s get into some best practices. The goal of your Microsoft Teams governance policies should be to ensure that your organization manages Teams in a way that complies with external and internal policies.

8 Governance Rules for Microsoft Teams

Once you’re familiar with the state, federal, and organizational policies that need to be adhered to, run through the following Teams governance checklist:

Rule 1 – Decide Who Can Create a Team

Determine how to control team creation within your organization. For some organizations, it may be fine to allow team creation to occur with very little oversight. Other organizations may require more control over the creation of new teams. No matter your needs, putting a policy in place will help prevent problems like “team sprawl.”

Rule 2 – Define Approved Purposes for Creating Teams

Larger organizations may want to establish governance criteria for approved purposes for creating Teams to control costs and risks associated with the application. By creating and communicating “approved purposes” for Team creation, you can ensure that all individual teams are aligned with your organization’s needs.

Rule 3 – Create Team Naming Policies

Consistency in how users name their teams helps to avoid the confusion created by duplicate team names or inconsistent naming conventions. The more you automate this process, the easier it will be to ensure that team names align with your organizational structure. Prefix-suffix naming policies and custom-blocked words (like profanity or copyright-protected words) will help keep everyone on track.

Rule 4 – Select Approved Integrated Applications

At some point during your initial Teams rollout, you may want to encourage employees to add integrated Microsoft applications or integrate third-party applications already used within the organization (e.g., Salesforce and more).

Rule 5 – Allow (or Prevent) Guest Access

Tenant controls in the Microsoft Teams Admin Center can help prevent data leaks that could cause catastrophic problems. By enabling secure collaboration with partners or vendors, you can define your organization’s global standard for who can access your Teams environment — inside and outside the organization — and from which devices.

Rule 6 – Manage Communication Capabilities (Chat and Messaging)

Microsoft Teams enables administrators to adjust chat capabilities, including stickers and other features. You can assign custom policies to users or groups of users that include blocks for profanity or culturally sensitive terminology and the ability to edit or delete chats once they have been posted.

Rule 7 – Develop Taxonomies to Label Documents

Create a taxonomy for labeling information contained within documents and files in the M365 Security and Compliance Center to fully automate and enforce content lifecycle and records management policies. This will help preserve Cloud storage space in SharePoint.

Rule 8 – Create Sunset Policies for Archiving and Deleting Teams

Administrators can use the Entra admin portal to set expiration policies as Teams environments need “sunsetting” or discontinuation. The platform alerts Team Owners before expiration and allows them to extend the team’s lifecycle.

Make Teams Work for You

Microsoft Teams makes collaboration and communication more efficient and effective, but the key to its success lies in strong governance and thoughtful configuration. By creating clear Teams governance policies before attempting configuration, you can reduce technology-associated risks, support information sharing, foster accountability and transparency, and create a secure, scalable platform that can fit your organization’s needs as it grows.

Do you need help implementing Microsoft Teams best practices across your organization? Our Microsoft Teams experts is ready to guide you. Let’s talk