Corporate Governance

It is the intent of this policy to provide guidance to Blyth, Inc. management in the use of non-audit services provided by the company's independent auditor.

This policy has been adopted having considered the provisions of the recently enacted Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder (the "Act"). The Audit Committee believes that independence is critical to ensure that the company's auditor act with integrity and objectivity. The Committee believes that the auditor not only must be independent in fact, but also must appear to be independent. At the same time, the Committee recognizes that there may be occasions when it may be practical and beneficial for management to have the flexibility to employ the special skills and resources of the independent auditor to perform non-audit work. With these goals in mind, the Committee hereby establishes the following guidelines for the use of the company's independent auditor for non-audit services.

1. Prohibited Non-Audit Services. The following types of non-audit services may not be provided by the company's independent auditor:

• Bookkeeping or other services related to the company's accounting records or financial statements;

• Financial information systems design and implementation;

• Appraisal or valuation services, fairness opinions or contribution-in-kind reports;

• Actuarial services;

• Internal audit outsourcing services;

• Management functions or human resources;

• Broker or dealer, investment advisor or investment banking services;

• Legal services and expert services unrelated to the company's audit; and

• Any other service that the Public Company Accounting Oversight Board determines, by regulation, is impermissible.

The meanings of the foregoing terms and the extent of the prohibitions contemplated thereby shall be construed in a manner consistent with the Act and the regulations promulgated thereunder by the Securities and Exchange Commission and the Public Company Accounting Oversight Board.

2. Pre-Approval Requirement. Except for prohibited non-audit services, the Audit Committee may engage the company's independent auditor to provide a non-audit service by two different approaches to pre-approving services which the SEC considers to be equally valid. Proposed services either may be pre-approved by agreeing to a framework with descriptions of allowable services with the Audit Committee ("general pre-approval"), or require the specific pre-approval of the Audit Committee ("specific pre-approval"). The Audit Committee believes that the combination of these two approaches will result in an effective and efficient procedure to pre-approve services performed by the independent auditor. As set forth in this Policy, unless a type of service has received general pre-approval, it will require specific pre-approval by the Audit Committee if it is to be provided by the independent auditor. The Committee may delegate to one or more of its members the responsibility for pre-approving any non-audit service to be performed by the company's independent auditor. In such event, the member(s) who pre-approve any permissible non-audit services shall report such pre-approval to the Audit Committee at or prior to its next regularly scheduled meeting.

3. In determining the appropriateness of using the independent auditor to perform a permissible non-audit service, the Audit Committee expects management to follow these ten factors developed and recommended by the Panel on Audit Effectiveness to the Public Oversight Board in its report dated August 31, 2000:

a. Whether the service is being performed principally for the audit committee.

b. The effects of the service, if any, on audit effectiveness or on the quality and timeliness of the entity's financial reporting process.

c. Whether the service would be performed by specialists (e.g., technology specialists) who ordinarily also provide recurring audit support.

d. Whether the service would be performed by audit personnel, and if so, whether it will enhance their knowledge of the entity's business and operations.

e. Whether the role of those performing the service would be inconsistent with the auditors' role (e.g., a role where neutrality, impartiality, and auditor skepticism are likely to be subverted).

f. Whether the audit firm personnel would be assuming a management role or creating a mutual or conflicting interest with management.

g. Whether the auditors, in effect, would be "auditing their own numbers."

h. Whether the project must be started and completed very quickly.

i. Whether the audit firm has unique expertise in the service.

j. The size of the fee(s) for non-audit service(s).

In addition, management should consider also:

• Whether responsibility for the services is separated from the audit engagement partner

• Confidence level in the audit engagement partner

The Securities and Exchange Commission has adopted rules that require enhanced disclosure with respect to the fees paid to the company's independent auditor. The Audit Committee believes that appropriate disclosure of such fees can contribute to the actual and perceived independence of the independent auditor in the eyes of stockholders and investors. Accordingly, the Audit Committee directs management to provide copies of its proposed disclosures with respect to such fees to the members of the Audit Committee for their review prior to the dissemination thereof to the public.