This report discusses the importance of a policy-guided administration. Policies enable an educational institution to attain credibility and continuity and to achieve its objectives. The principal's role as educational leader and executive officer is to help the board to identify policy needs and to monitor and evaluate programs. Policy-making is basically the board's perogative. Every board of education has four responsibilities: (1) to establish the objectives of the school, (2) to determine policies, (3) to review decisions made by the administrative staff, and (4) to evaluate policy decisions. (Author/LD)