Canadian companies that have been slow to address the issue of board diversity could find themselves under greater pressure from shareholders in the upcoming proxy season.

Institutional Shareholder Services Inc. (ISS), a proxy advisory firm based in Rockville, Md., will now recommend that shareholders withhold votes from companies’ nominating committee chairpersons, or board chairpersons, in cases where a company has no female directors and no formal diversity policy, the company has announced.

Its new policy on board diversity will apply to companies on S&P/TSX composite index in 2018, and it will be extended to all TSX-listed companies in 2019.

The policy changes reflects the views on Canadian institutional investors and securities regulators that want to see more progress on gender diversity, ISS says in a statement.

Additionally, ISS’s pay-for-performance methodology for both Canadian and U.S. issuers will be modified to include the rankings of CEO total pay and company financial performance within a peer group measured over a three-year period. The company is also changing its U.S. policy to explicitly vote against board members responsible for approving excessive director pay.

For Canada, ISS is also making changes to its policy on directors that sit on too many boards — a practice known as overboarding — that aims to align its Canadian voting policies with the approach of global institutional investors, and with recommendations from the Canadian Coalition for Good Governance. However, the new policy won’t apply to the coming proxy season. Instead, ISS is providing a one-year transition period on the implementation of the updated policy until 2019 to give directors that are on too many boards time to address the issue.

ISS also announced a variety of other changes to its benchmark proxy voting policies in other markets around the world. The updated policies will generally apply to shareholder meetings that take place after Feb. 1, 2018.