Question

what is the normative goal of financial management?​

Answer 1

The normative goal is to formulate sound principles considering sustainability.

• The objective is to address regulatory, socioeconomic, and ecological elements while formulating investment decisions for the financial sector.
• Longer-term investments in projects and economic activities that are sustainable are the outcome of this fundamental goal.
• A strong rationale for developing information and decision-making frameworks to support business planning is provided by normative finance theory.
• It results in the establishment of robust corporate governance rules, and worldwide best practices offer a strong foundation for efficient financial management.
• Additionally, the administration of public and private institutions functioning properly is also taken into consideration.
• It includes employee relations and compensation which play a crucial role in ensuring the inclusion of social and environmental issues in the decision-making process.

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