This paper is part of a collection of 54 papers from the 48th annual conference of the Education Law Association held in November 2002. It discusses teacher evaluation by principals. Specifically, it presents findings of research that examined the nature of policy creation at the local board level in response to accountability legislation in North Carolina; the impact of North Carolina's accountability program on principals in their role as teacher evaluators; and the implications for principal-preparation programs. (The study was limited to schools in eastern North Carolina.) The findings reveal, among other things, that action plans have become an accepted method for dealing with the pressure administrators face to improve learning and that most of the actions plans were written for teachers who did not work in low-performing schools, which seems to indicate that, because this policy followed the model created by the state's school board association, the association may have significant influence over the creation of local policy. Implications of these findings indicate that principal-preparation programs need to help their students understand the legal implications of policy that utilizes action plans, and to examine how such programs prepare students to work with teachers to improve performance. (WFA)