This document contains the Virginia Beach superintendent's report to the school board on the adoption of a resolution that supports school-based management (SBM) and shared decision making. On December 17, 1991, the school board passed the "Resolution of Support for School Based Management and Shared Decision Making." The report contains a summary of the principles of school restructuring and school-based management, with a focus on the following areas--governance, shared decision making, staff development, accountability, resource allocation, and organizational climate. Expectations for curriculum and instruction are described next, specifically, those for academic excellence, instructional support, and organizational matters. Class size, as a balance between instructional effectiveness and cost efficiency, is also discussed. In summary, when faced with policy decisions, the school board and superintendents should try to answer these three essential questions: (1) Does the decision improve learning? (2) Does it improve working conditions? and (3) Does it maintain a balance between efficiency and effectiveness? Appendices contain a list of competencies of the effective principal and principles for the application of systems leadership. (LMI)