Smith has been a member of the Fairtrade Foundation board for 10 months. He replaces Mike Gidney, who is stepping down as chairman after three years.
Harriet Lamb, executive director of the Fairtrade Foundation, said: "David brings a fresh creative perspective to developing business growth in the Fairtrade sector. His wealth of experience in the consumer-facing retail world, combined with his commitment to development issues, means he is uniquely well placed to help the Foundation scale up to deliver greater benefits for producers."
She added: "David will now help the organisation deliver the goals of the strategy which, over the next five years, seeks to tip the balance of international trade in favour of disadvantaged producers."
The aim is to have doubled the number of farmers and workers in the developing world benefiting from sales of Fairtrade products in the UK.
Smith said: "I am looking forward to working with the Fairtrade team in developing and implementing their growth strategy."