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Chief executive Doug Pearce concludes that while it might be effective, quotas “would not be acceptable in Canada today.”

The proposal is perhaps the most aggressive one put forward to date on the issue and has sparked the ire of those who oppose heavy handed quota systems. But Mr. Kozun said it would be a solution that could generate better stock returns.

“The selection of a minimum of three women on a board is rooted in the belief that board diversity yields more effective boards and better results for shareholders,” Mr. Kozun said in the letter, adding that the pension plan’s proposal is “not based on meeting an arbitrary target simply for the sake of meeting that number.”

He said the threshold of three women directors was selected based on a “review of the research,” which also led pension plan officials to conclude that “without such a push it is not evident that sufficient progress in improving diversity would be made.”

Four women are on Teachers’ nine-member board, including chair Eileen Mercier who was appointed to the position at one of Canada’s largest pension plans in 2005. In an interview, Mr. Kozun said he expects the pension plan’s proposal will receive support from teachers in Ontario, 73% of whom are women.

Mr. Kozun said officials at the pension plan felt the need to push into the controversial territory because simply encouraging companies to comply with suggested goals and allowing them to explain themselves when they do not has already proven ineffective in jurisdictions outside Canada, including Norway and the United Kingdom. Sanctions or even threats of sanctions, on the other hand, have been effective in achieving a measurable increase in women on boards, he said.