Like school-based management, school-site councils offer some attractive reform possibilities, including broadly based, democratic decision-making; enhanced sensitivity to specific school climates; and widely shared responsibility. Site councils can be ineffective, even harmful, when lacking sufficient support, expertise, and time to succeed. This bulletin suggests ways to construct effective site councils, pointing out councils' possibilities and the demanding steps required to realize them. Chapter 1 discusses the nature of school-site councils, their relationship to school-based management, their many advantages, and necessary development precautions. Chapter 2 shows how to initiate a school-site council, treating council composition, selection of leaders and members, and bylaws, training, and first steps. Chapter 3 describes how councils actually operate; topics include running meetings, making decisions, overcoming common difficulties (such as authoritarian principals, factionalism, lack of time, and accountability), and developing effective roles for principals, teachers, and other council members. The final chapter surveys the relationship between the site council and other groups, including parents, school and district staff, and the school board. The chapter closes by discussing the policy implications of school-site councils. Contains 26 references and a list of 24 interviews. (MLH)