Failure in implementing education policy affects not only school leadership practices but also the overall quality of public education. This study aims to investigate the implementation of educational policies made for (a) the recruitment of school principals and (b) guiding their responsibilities in community schools of Nepal. Drawing on interviews conducted with 12 principals and six teachers, we examine whether Education Regulation enacted by the Government of Nepal in 2002--mainly Rule 93 on the criteria for the selection of principals and Rule 94 on their assigned responsibilities--was fully implemented. Our findings show that overpoliticization in school management, top-down approaches to policymaking, lack of transparency and awareness about policy provisions, and workload pressures for principals have resulted into implementation failure. For implementing educational policies related to school leadership, frequent training for principals, presence of media for parental awareness, and legal institutions for justice are important.