John Hiney, managing director of Carlson Marketing, has been elected as the council's vice chair.
Bailey's appointment follows the departure of former chair Chris Arnold, who stepped down in March after four years service to pursue a commercial venture.
Bailey, who will serve a three-year term, will formally accept his role at the council's next meeting on April 27.
The Agencies Council said that it is currently focusing on developing best practice guidelines for a number of areas including helping agencies to understand intellectual property rights to protect their ideas, and refining the pitch process to make it fairer for both agency and client alike, as well as taking suppliers into consideration.
The Council is also spearheading the DMA's Agency Pit Stop advice service, which provides specialist business consultancy to the DMA's agency members
Bailey said: "This is an interesting time to be taking over the Agencies Council chair. We're in the midst of a period of massive economic change, consumer buying power continues to increase and new direct response channels are opening up, all of this set against a backdrop of growing environmental and regulatory responsibilities."
David Metcalfe, chair of the DMA Board, said: "I would like to congratulate both Shaun and John on their election to chair and vice chair. The Agencies Council has achieved a great deal under Chris Arnold's stewardship in addressing the issues that affect DM agencies, so he will not be an easy act to follow."