The art of frustration: Royal Academy in turmoil again after American head quits

As a senior partner in Goldman Sachs, Lawton Fitt's ability to cut deals and knock heads together in the cut-throat world of high finance made her a millionaire many times over.

But when it came to the Royal Academy, it seems the "arcane" ways of the 236-year-old institution, set up by George III to nurture tempestuous artistic talents, were too much for the banker once voted among America's 50 most powerful businesswomen.

Ms Fitt, 51, announced her resignation yesterday as secretary of the RA, two years after becoming the first American and first woman to head one of the most revered art establishments. The former technology stocks expert, whose appointment was hailed by the RA as a "huge catch", said her departure was out of frustration at the failure of her attempts at reform after scandals behind the doors of the august institution whose corridors were walked by Constable and J M W Turner.

She told The Independent: "I have been repeatedly frustrated in my efforts to make changes, do some things I think the Academy would benefit from, and finally that frustration has told. There's a lot of ambiguity about who is responsible for what. Authority and accountability don't necessarily match, and it makes it extremely difficult to move anything forward."

The announcement will throw the Academy into renewed turmoil as it struggles to avoid slipping into a financial deficit next year and now faces the replacement of two of its senior staff.

Next week, the 80 Royal Academicians who govern the institution will gather at the famous Burlington House building on London's Piccadilly to elect a new president after the decision of the sculptor Philip King to step down. The RA said the process of replacing its "highly successful" secretary, equivalent to its chief executive, would begin shortly.

Ms Fitt, who took a huge pay cut in the £100,000-a-year post, said she was stepping down now to avoid disrupting the new president's term. The Boston-born financier, who recently spent £4m on a Manhattan loft, had been privately criticised for trying to impose a corporate culture on the Academy, unused to the management-speak of corporate America.

The institution, which is an art school as well as an exhibition space, has suffered for years from tension between its artist governors and its professional administrators. Last night Ms Fitt called the RA's decision-making process "arcane" as the Academy said it had appointed a panel led by Sir David Rowland, former chairman and chief executive of the NatWest bank, to review its governance structure.

Under its complex structure, the academicians are chosen on a strict quota basis from painters, print makers, sculptors or architects. A governing council of 20 is chosen from them.

Ms Fitt refused to comment on whether her departure was partly due to her prickly relationship with Norman Rosenthal, the RA's exhibitions secretary, responsible for such mould-breaking shows as "Sensation". This year, Ms Fitt called for Mr Rosenthal's resignation when he made clear his displeasure at apparently being excluded from a high-level meeting in France. But the Academicians, who include David Hockney and Sir Peter Blake, stoutly defended Mr Rosenthal's position.

Ms Fitt said: "Much too much attention has been given to individuals. The issue ... is how the organisation runs, and making sure everybody in the organisation does whatever is best for the organisation."

Despite attracting huge numbers to its blockbuster exhibitions, from Monet to the Aztecs, the Academy's reputation has suffered setbacks. This summer, its leading professor, Brendan Neiland, resigned after the discovery of an unauthorised bank account and spending of £80,000 in breach of internal rules. In 1996, the Academy's bursar, Trevor Clark, was dismissed for stealing £400,000. He was jailed for five years.

Despite assurances that procedures have been overhauled, insiders say little has changed. Observers will be struck at the resemblance between Ms Fitt's parting remarks and those of her predecessor, David Gordon, the former chief executive of ITV, who left in 2002 after falling out with Mr King.

Mr Gordon said this summer: "The bottom line is that the RA is an institution suffering from a chronic case of poor governance and will lurch from crisis to crisis until there is fundamental reform and modernisation of its constitution."

Funded by donations and its own enterprises, the RA must raise £23m every year to meet its running costs. Ms Fitt said the Academy had become over-reliant on exhibition income but admitted much was riding on the success of its blockbuster "Turks", opening next month.