Apart from all the straightforward things that too many people don't do (meet regularly, help find a problem and suggest a plan of attack, help package partial progress into complete if modest theorems, etc) here's the big one:

Be honest if things are going badly! Ask your student what their goals are. This basically means ask when do they expect to graduate and what kind of job do they want. If they are not on track, say so, because I bet you they didn't know that. Please do not tell them they're not ready at the last second, or write them a lukewarm letter while smiling to their face.

Apart from all the straightforward things that too many people don't do (meet regularly, help find a problem and suggest a plan of attack, help package partial progress into complete if modest theorems, etc) here's the big one:

Be honest if things are going badly! 

Ask your student what their goals are. This basically means ask when do they expect to graduate and what kind of job do they want. If they are not on track, say so, because I bet you they didn't know that. Please do not tell them they're not ready at the last second, or write them a lukewarm letter while smiling to their face.