The Ontario Teachers’ Pension Plan is setting higher expectations for increased participation of women in board roles at large-cap companies in 2023.

The pension fund’s proxy voting guidelines advocate for large-cap companies on developed market indices to increase the number of women directors on their boards to a minimum of 40 per cent, up from the prior expectation of a minimum of 30 per cent established in 2013.

Across most of the developed markets in which the Ontario Teachers’ is invested, the average gender diversity on boards exceeds 30 per cent, according to a press release, which noted a handful of developed markets, including France, Italy and Norway, have adopted a minimum of 40 per cent women in boards.

Read: More women on boards, but work required to increase overall diversity: report

“Although we still consider a 30 per cent goal to be meaningful, we’re raising the threshold to challenge public companies in developed markets to keep improving as we strive for truly diverse and representative boards,” said Anna Murray, the pension fund’s senior managing director and global head of sustainable investing, in the release. “We believe improved diversity is key to board effectiveness, leads to better performance and delivers long-term value for shareholders.”

Additionally, the guidelines encourage boards to use self-disclosure as a means to demonstrate their commitment and progress towards creating a board that’s diverse beyond gender, noted the release. To improve transparency on board diversity, the Ontario Teachers’ is encouraging companies to separate diversity disclosure between gender and other forms of diversity. As part of these efforts, the guidelines suggest expanding disclosure reporting of board members to include those who self-identify as non-binary in addition to those identifying as women or men.

The guidelines also ask boards to set and disclose time-bound targets to increase the number of board directors identifying as a member of an under-represented group and to report on the achievement against those targets.

Read: CPPIB proxy voting policy targeting sustainability, board term lengths and diversity: report