On 23 October 2026 it will be 100 years since the death of Iba Teigo, second Director-General of the House of Sumitomo. He was not a Sumitomo but a salaried former judge, brought in by his uncle. He took over a family business whose copper mine was poisoning its neighbours’ fields, moved the smelter out to sea, began replanting a ruined mountain range, helped found a bank and replaced one-man rule with a board. Then he resigned, writing that the greatest danger to a business is not the mistakes of the young but the dominance of the old.
For wealthy families, his story is about two kinds of succession that are easy to confuse: who owns the business, and who runs it.
An owner family and a hired hand
Sumitomo’s core asset was the Besshi copper mine in Shikoku, opened in 1691. From 1877 the house was run by a salaried manager, Hirose Saihei, who was given full authority because the family head was in poor health. In 1892 the family adopted an heir from the aristocratic Tokudaiji family, Tomoito, a brother of the future prime minister Saionji Kinmochi. He became the 15th head in 1893. The National Diet Library’s biography calls him “more a symbol than a business man”.
Iba, born in 1847 in Ōmi province (today’s Shiga), was a judge at the Osaka Superior Court before joining Sumitomo in February 1879 at the urging of Hirose, his uncle. Within three months he ran the Osaka head office.
Smoke over the copper mountain
By 1893 sulphur dioxide from the smelters near Niihama was ruining crops, local farmers were in uproar, and there were calls for Hirose to resign. Japanese encyclopedias describe a revolt against his autocratic style, and he soon left. In July 1894 Iba went to Besshi as its general manager. He began by touring the mine and listening to miners, clerks and farmers.
His remedy was bold. In November 1895, according to Sumitomo’s official history, he secretly bought Shisakajima, a group of uninhabited islets about 20 kilometres off Niihama, in his own name. Construction of a new smelter there began in 1897, and it opened in January 1905. The cost rose from an estimated 500,000 yen to 1.73 million yen.
It did not work as planned. The wind carried the gas to farms along the Shikoku coast, and protests, compensation and limits on smelting followed for decades, until a plant to neutralise the gas was completed in 1939.
Planting the mountains back
The mountains around the mine were bare from logging and smoke. In 1894 Iba launched what Sumitomo calls its Great Afforestation Plan. Before then the mine had planted fewer than 60,000 saplings a year; under the plan it planted more than a million. The mountains, he said, had to be restored to their “original verdant state” and returned to nature. At the peak, under his successor, more than two million trees a year went in. The forestry business that came out of the mine’s forests has carried the name Sumitomo Forestry since 1955.
A bank and a board
On 4 May 1895 Iba chaired the first meeting of Sumitomo’s executive board, at the Onomichi branch on the Inland Sea. The agenda included founding a bank, and Sumitomo Bank opened on 1 November 1895. Just as important was the form: a board deciding together, not one powerful manager. In 1896 the house rules were rewritten around that board and a new title, Director-General (soriji). Iba became acting Director-General in 1897 and took the post in 1900, declaring that Sumitomo’s business had to benefit the nation and society, not only Sumitomo.
Leaving at 58
On 6 July 1904 Iba resigned, four years after taking the top job. He was 58 by the traditional Japanese count that most sources use, 57 by the Western one. Two senior colleagues left with him, and Suzuki Masaya, 44 by the same traditional count, became Director-General.
Japanese accounts say he explained himself in an essay for the business magazine Jitsugyō no Nihon. The Sumitomo Group’s own history gives the key line as 「事業の進歩発達に最も害をするものは、青年の過失ではなくて、老人の跋扈である」. In English: what does most harm to the progress of a business is not the mistakes of the young but the bakko of the old, a word for running rampant and domineering. Other sources differ slightly (発展 for 発達, ではなくして or ではなく for ではなくて), and even the essay’s title appears in two word orders. The meaning never changes, but we could not check the 1904 magazine itself.
Iba retired to his villa, Kakkien, in Ōtsu. He died there on 23 October 1926, according to the Sumitomo Group and the National Diet Library; some references, including Japanese Wikipedia, give 22 October. The family head, Tomoito, had died that March.
Owning versus running
Rockefeller is a useful contrast. He stopped directing Standard Oil in 1896 but kept the title of president until 1911 (see our Rockefeller series). Iba owned nothing; he handed over authority, and the title with it. The Sumitomo family stayed the owners, with professional managers in charge, until the occupation reforms after 1945, including the 1946 capital levy. Our post on five common mistakes starts with the missing succession plan. Iba shows that families need one for who runs the business, not only for who inherits it.
A fair caveat
Much of the story comes from Sumitomo’s own history and is often told as a parable. The island smelter spread the pollution over a wider area for decades. Iba did not vanish in 1904: at the family head’s request he stayed on as an adviser, and Kotobank dates his final retirement to 1923.
Five lessons to take away
- Owning and running are different jobs. Sumitomo kept ownership in the family and gave management to salaried professionals.
- Fix the cause, then check the result. Moving the smelter was bold, but ending the pollution took 34 more years and new technology.
- Some investments pay over a century. The replanting began as repair and is now part of Sumitomo Forestry’s heritage.
- Build a board while things are calm. Collective decisions at Sumitomo began with one meeting in Onomichi.
- Plan your own exit. The hardest step in succession is the one the current leader must take himself.
Questions to bring to your advisors
Who runs our family’s businesses and investments today, and what happens if that person stops? Do our managers, family or hired, have a fixed term or a retirement age? Is there a board that can decide without one dominant voice? These are questions to bring to your advisors, not advice.