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Standardized testing plays a significant role in education reform and school improvement in East Asian systems, including Hong Kong, often tied to accountability and selection processes (Yan & Brown, 2021). However, its influence on equity and well-being remains a concern (Chan et al., 2022). This study examines how standardized testing impacts school improvement and reform, with a focus on equity implications for school leaders' decision-making. Using a critical policy analysis approach, it explores the challenges school principals face in navigating the policy and accountability frameworks. While Hong Kong’s testing system shows low inequity, disparities persist for ethnic minorities. The findings underscore the need for a broader data approach to promote equity, well-being, and educational inclusion.