Agile software development is a popular approach for developing software. Another important topic of research in software engineering is code quality. Unfortunately, a minimal amount of extensive research has been done on how these two influence each other. The goal of this study is therefore to explore the connection between these two using a qualitative approach. To understand this connection we will use Grounded Theory as a qualitative methodology to interview 20 participants across two organisations. In doing so we present a detailed description of Grounded Theory implementation and the results we obtain from it. The results are used to explore the relation between code quality and agile software development. The results show that team empowerment is the core relation between them. The results are structured in a theory which establishes four core values for achieving team empowerment, conditions that apply to these values and which practices can be applied to stimulate the conditions. The outcomes of the study are further verified using an online questionnaire across multiple countries. The theory will be expanded further to establish theoretical links between Agile best practices and code quality metrics to give teams concrete solutions to improve their code quality scores.