Cephalotus follicularis in cultivation do not seem to like to be too waterlogged and I do not let them sit in water trays but on a bed of constantly moist not wet sand. I find the wetting then slight drying of the compost draws air in to the compost and encourages root formation - the real basis of any healthy plant.

I used to water my plants from the top using either rain water or distilled water by gently running it around the plant, avoiding the crown, to maintain a constant moist to very moist soil.
However, I now water them by standing each pot indivually in a container of cool water (about 60F) up to 1inch below the pot rim. This water, which has a very small amount of wetting agent added, is constantly aerated using an aquarium air stone and pump and I allow the compost to become very moist before removing the pot to the sand bench. I find this super aerated water encourages a healthier root system. I do this twice a week in summer, once every 2 weeks in spring and autumn, and once a month in winter but at a lower water level - just 3 inches deep.

Another successful method I've used is capillary matting - it keeps the compost moist but not wet with the added advantage of being self-watering, as long as the reservoir of water is maintained.

Just remember - Never ever let the soil dry out. Never ever use tap water unless its TDS is below 50ppm, use rainwater, distilled water or reverse osmosis water.