GOULI
To completely mitigate the risk to people not involved or attending an air display, due possible aircraft malfunction or pilot error as you appear to want, is unrealistic.
You would need to sterilise(i.e temporarily remove all the inhabitants)in the area around and under the intended flightpath of display participants. In this case no off airfield spectators on all roads under the flightpath, all local highways closed to traffic, large police presence to enforce, and empty most of Shoreham town.
or of course ban all air displays.
Nothing in life is risk free. This was a tragic accident and knee jerk reactions are not the solution.