How do promotions work in the National Guard?

For starters, you will be competing for open SGT slots in the state your NG unit is in. So, if there are 20 12B SPCs in your state competing for 7 open SGT slots in your state. Better be on your game to have the maximum amount of points possible.

Completing your profile or at least mentioning what state you are in would help with answers.
If you are asking this question now because you haven't heard anything about this from your Guard unit, things probably aren't going to go well for you on this year's board, because all promotion packets, self-declines and command-decline counselings are due at state very soon. If that is the case, you need to contact your Readiness NCO ASAP.

In ARNG, E5 and E6 boards are decentralized, conducted at BN or BDE level.
Those boards review and vote on paper packets that have some input from the Soldiers.
That paper packet includes a 4100 signed by you, that has your most recent APFT and IWQ scores and all previous awards on record. It also includes your ERB, E4 evaluation sheets from leaders, your SSD1 cert, and 1059 if you completed BLC.
If you have not been working on this with your Guard unit since at least January, you are behind the curve and probably won't do well this year, because this packet is probably due between 31 MAR and 7 APR in your state.

If you and your unit are tracking and this is all complete and you are just wondering "how it all works", then the rest works like this:
Your packet will get voted by at least 3 board members in APR or MAY, and get a hard score. Soft points will be added to further rank you by time in service/time in grade against those E4s that got the same hard score as you.
That promotion list; MDAY E5 12B in your case, will be published around June.
Then BDEs will start filling MDAY 12B E5 vacancies from that list starting from the top and offering in order those that have completed BLC, then starting at the top again with those that have not completed BLC. This process will continue until all MDAY 12B E5 vacancies are filled.
Those offers are direct emails or phone calls to the MDAYs on the promotion list, they usually have 3 days to respond to the offer.
If the offered E4 has BLC complete, the effective date of promotion is the day he accepted. If the offer is a STEP (must complete BLC) then the effective date is date of graduation. In either case, the soldier is transferred to the promotion position after accepted.
Every year, every state G1 publishes an Enlisted Promotion System Memorandum of Instruction (EPS MOI) sometime between JUN and OCT for the FY, that explains how this works.
A decent Readiness NCO forwards that MOI and their 4100s to all unit members.
A decent MDAY can read the MOI and complete the process with no further help.
A decent MDAY 1SG assigns an NCO to break this down in a 30 minute LDP class to all E4s and above at a home station drill sometime between OCT and JAN.

AR 600-8-19 Chapter 7 outlines how the ARNG promotions work.

Each state will have a yearly (at least) board that convenes and compiles a promotion list of all promotable soldiers in each MOS. Instead of a cutoff score, the list is ordered by the highest scoring soldiers in an MOS, and next grade vacancies are filled from the top of the list first.

If you're open to reclassing, there are statewide vacancies that occur when an MOS doesn't have any more Soldiers on the list, so they can be filled by anyone at the commander's choosing. I ended up getting an E5 slot this way when I wasn't yet promotable.