Kennett said an agreement was put in place last year to evaluate Clarkson's performance towards the end of the 2011 season.
Clarkson was reappointed this week for a further three years.
"Twelve months ago the board and Alastair entered into an agreement that towards the end of the home and away season of this year, we would re-consider his contract," Kennett said at his last president's function as club chairman before the Hawks and Western Bulldogs game on Saturday.
"Why wait so long? Because 2009 and particularly 2010 for all of us were great disappointments.
"And I clearly remember Alastair saying to me that if he couldn't lift the team this year he didn’t know if he'd be the right person to lead the club beyond the end of this year's contract. One of the KPIs (key performance indicators) we set was that we had to finish top-four."
Kennett said the board had made an "assumption" several weeks ago that Hawthorn would finish the season in the top four to guarantee Clarkson's position, and that the premiership coach was not driven - or enticed - by potentially lucrative offers from other clubs.
"Alastair Clarkson is not driven, as a first priority, by money, and the club will not, and has not, taken advantage of that knowledge," Kennett said.
"Hawthorn will never be the trendsetter in terms of what we pay for CEOs, coaches or for players. To do so would be irresponsible. We've got to be able to exist as a commercial operation."
Meanwhile, Kennett said an independent piece of research undertaken by PricewaterhouseCoopers had shown Tasmania's sponsorship of the club was worth $58 million a year to the state - not $15 million as previously suggested.
Kennett said the report, which studied Hawthorn's economic impact in 2010, had taken football sponsorship to another level and that it still had room to grow.
"I don't know of any sponsorship in Australia that in percentage terms gives such a real return for the sponsor. And 2011 will be bigger because we have taken some very large groups to Tasmania," Kennett said.
"I suspect over the next five years, given the sponsorship is about the same at $3 million, that we will be bringing to the Tasmanian economy close to $400 million. It is an extraordinary partnership."
Follow Callum Twomey on Twitter at @Cal_Twomey.
