40 yards with 223 FMJ? That's well inside the 150-200 meters most manufacturers and the military state as the minimum range. Not to say I haven't done it and have some scars to prove it.
But as to your question, thickness is less important than hardness. US Army and Marine regs state that AR400 steel is the minimum hardness and 3/8 thickness as a minimum. Most target manufacturers use AR500. Thick mild steel will just get tunnels through it, no matter how thick it is.
The splatter angle is 20 degrees from the target face in all directions so ensure nothing that will get eaten up (plastic, wood, etc) lies in that cone. And don't rigidly mount your target. That doesn't allow it to absorb energy and causes worse damage to your target. Our targets (Marines) are free swinging at a 20 degree forward angle to absorb energy and deflect splatter into the ground at the base of the target.
For the record I shoot 8 inch plates with 5.56 at 50-200 meters, but I load HP, soft point, or frangible for use on steel at close range.